The www.diamonds.net portal reports that U.S. consumers did not feel as good about economic conditions in June 2010 as they did one month ago, according to the Conference Board Consumer Confidence Index released on June 29. The index for June was 52.9 points and while that reading was a little better than the score of 49.3 points posted one year ago, the Conference Board noted a sharp decline in confidence compared with the May 2010 reading.
This monthly measure is based on the 1985 benchmark level of 100 points, with readings below that benchmark signaling weak consumer confidence. The index has not reached 100 points since August 2007.
The June confidence data, along with disappointing reports on the housing market and consumer spending, sank the Dow level more than 2 percent in late morning trading or by 223 points to 9,915.72 points as of 11 a.m. in New York.
Meanwhile, the Conference Board's Present Situation Index for June 2010 was nearly identical to that of one year ago at 25.5 points and the Expectations Index was 71.2 points this month compared with 65.5 points in June 2009.
Lynn Franco, director of The Conference Board Consumer Research Center, said, “Consumer confidence, which had posted three consecutive monthly gains and appeared to be gaining some traction, retreated sharply in June. Increasing uncertainty and apprehension about the future state of the economy and labor market, no doubt a result of the recent slowdown in job growth, are the primary reasons for the sharp reversal in confidence. Until the pace of job growth picks up, consumer confidence is not likely to pick up.”
Consumers who felt that conditions were “good” in June decreased to 8 percent from 9.7 percent in May, while those saying business conditions were “bad” increased to 42.4 percent from 39.5 percent one month ago. Consumers’ assessment of the labor market was also less favorable, with those claiming that jobs were “hard to get” increasing to 44.8 percent from 43.9 percent in May and those saying jobs were “plentiful” decreasing to only 4.3 percent from 4.6 percent last month.
Consumers’ short-term outlook for the economy, which improved significantly during May, turned more pessimistic in June. Those anticipating an improvement in business conditions in the upcoming six months decreased to 17.2 percent from 22.8 percent in May, while those expecting conditions to worsen rose to 14.9 percent from 11.9 percent in May.
Consumers were also much less optimistic about future job prospects. The percentage of consumers anticipating more jobs in the months ahead decreased to 16 percent in June from 20.2 percent in May, while those anticipating fewer jobs increased to 20.8 percent from last month's 17.8 percent. The proportion of consumers anticipating an increase in their incomes declined to 10.6 percent in June from 11.4 percent in May.
