The privately run Consumer Conference Board said their gauge found Americans are less optimistic about current and future job growth in June. The index of consumer confidence plunged to 90.9 in July from a revised 99.8 in June, which was initially reported at 101.4.
Not only does the index currently stand at its lowest level since September 2014, economists surveyed by The Wall Street Journal had forecast the latest index to drop to only 100.0. The percentage of consumers expecting business conditions to improve over the next six months declined from 17.9 percent to 14.7 percent, while those expecting business conditions to worsen rose slightly from 10.2 percent to 10.7 percent.
“Consumer confidence declined sharply in July, following a gain in June. Consumers continue to assess current conditions favorably, but their short-term expectations deteriorated this month,”said Lynn Franco, director of economic indicators at the board. “A less optimistic outlook for the labor market, and perhaps the uncertainty and volatility in financial markets prompted by the situation in Greece and China, appears to have shaken consumers’ confidence. Overall, the Index remains at levels associated with an expanding economy and a relatively confident consumer.”
The present situation index, a gauge of consumers’ assessment of current economic conditions fell to 107.4 from a revised 110.3 in June, originally put at 111.6. Consumer expectations for economic activity over the next six months plunged to 79.9 from a revised 92.8, originally reported as 94.6. Those saying business conditions are “good” decreased from 26.1 percent to 24.2 percent. However, those claiming business conditions are “bad” was virtually unchanged at 17.9 percent. Consumers were slightly less positive about the job market. Those stating jobs are “plentiful” decreased from 21.3 percent to 20.7 percent, while those claiming jobs are “hard to get” increased marginally from 26.1 percent to 26.7 percent.
According to the board, consumers are less certain about the labor markets.
The share of respondents anticipating more jobs in the next six months fell to 13.1 percent in July from 17.1 percent in June. The share expecting fewer jobs jumped to 20.0 percent from 15.2 percent. The Federal Reserve Open Markets Committee, the policy-making committee at the Fed, will starts a two-day meeting on Tuesday and will release a policy statement on Wednesday.