Consumer confidence will go to zero soon if it keeps falling at the current rate. The Conference Board reports that in July the figure hit 50.4 down from 54.3 in June.
Two other data sets, rarely used, also dropped: “The Present Situation Index decreased to 26.1 from 26.8. The Expectations Index declined to 66.6 from 72.7 last month.” One is an indication about how consumers feel now the other how they feel when they look ahead six months.
Says Lynn Franco, Director of The Conference Board Consumer Research Center: “Consumer confidence faded further in July as consumers continue to grow increasingly more pessimistic about the short-term outlook. Concerns about business conditions and the labor market are casting a dark cloud over consumers that is not likely to lift until the job market improves. Given consumers’ heightened level of anxiety, along with their pessimistic income outlook and lackluster job growth, retailers are very likely to face a challenging back-to-school season.”
The information adds to a cascade of bad news about housing, unemployment, and GDP. Each week that passes now brings new news that a double dip recession remains a real possibility, that GDP for June may have been negative, and that the third quarter could be even worse.
Douglas A. McIntyre
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