US consumer confidence falls to lowest point since late last year

28 August 2012 18:13  [Source: ICIS news]

WASHINGTON (ICIS)--US consumer confidence declined in August, the Conference Board said on Tuesday, falling to its lowest level since late last year as consumers have become more apprehensive about business and employment prospects.

The Conference Board, a 95-year-old business analysis firm in New York City, said that its closely watched consumer confidence index (CCI) fell by nearly 5 percentage points in August to 60.6 from the July measure of 65.4.

July had seen the first increase in the consumer confidence index after four straight monthly declines from March through June.

But July’s gain of 2.7 percentage points from the June reading has been more than offset by this month’s drop of 4.8 points.

The index is measured against a baseline figure of 100% set in 1985.

In addition, the board said that its index of consumers’ expectations fell even further in August, dropping almost 8 points to 70.5 from July’s reading of 78.4.

Consumers’ sentiment about their current situation was essentially unchanged in August, the board said, edging slightly down to 45.8 this month from July’s 45.9.

Lynn Franco, director of economic indicators at the Conference Board, noted that the CCI “is now at its lowest level since November 2011 when it was 55.2”.

“A more pessimistic outlook was the primary reason for this month’s decline in confidence,” Franco said.  “Consumers were more apprehensive about business and employment prospects.”

The board’s monthly consumers survey also showed that US households are growing more pessimistic about the near-term outlook.

“The percentage of consumers expecting business conditions to improve over the next six months declined to 16.5% from 19%, while those anticipating business conditions will worsen increased to 17.7% from 15.1%,” the board said.

“Consumers’ outlook for the labour market also was less favourable,” the report said.

“Those expecting more jobs in the months ahead decreased to 15.4% from 17.6%, while those anticipating fewer jobs rose to 23.4% from 20.6%,” the board said.

Despite the generally negative indicators for consumers going forward, the board said that the percentage of those employed who expect more income improved to 15.7% in August from the July reading of 14.2%, although this index remains quite low.

Paul Hodges studies key influences shaping the chemical industry in Chemicals and the Economy


By: Joe Kamalick
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