Consumer confidence tumbled in August as troubles in business, stocks and mortgages put Americans in a darker mood, The Conference Board reported today.
The Consumer Confidence Index fell to 105 this month from 111.9 in July, reversing all of last month’s gain.
Lynn Franco, director of The Conference Board Consumer Research Center, said in a statement that “a softening in business conditions and labor market conditions” was responsible for the drop in confidence, while “volatility in financial markets and continued subprime housing woes may have (also) played a role in dampening consumers’ spirits.”
According to the survey, the percentage of consumers claiming present-day conditions are “good” decreased to 26.4 percent in August from 28.3 percent in July, while those saying conditions are “bad” increased to 16.3 percent from 14.5 percent. Those saying jobs are “hard to get” increased to 19.7 percent from 18.7 percent, and those claiming jobs are “plentiful” decreased to 27.5 percent from 30 percent.
Those expecting business conditions to worsen in the next six months rose to 10.6 percent in August from 8.2 percent in July, while those anticipating business conditions to improve was virtually unchanged at 15 percent, the survey found. The percent of consumers expecting more jobs in the months ahead declined to 13 percent from 13.8, while those anticipating fewer jobs increased to 15.3 percent from 14.9 percent. The proportion of consumers expecting their incomes to increase in the months ahead was virtually unchanged at 19.1 percent.
Franco added that “despite less favorable conditions and in spite of all the recent turmoil, consumers still remain confident. And, current index levels suggest further economic growth in the months ahead.”
The Consumer Confidence Survey is based on a representative sample of 5,000 U.S. households.