Efforts to Pause States Reopening Hurting the Economy
The Conference Board Consumer Confidence Index (CCI) fell by 5.7 points in July after gaining significantly in June, missing economists’ expectations. The Index now stands at 92.6 (1985=100), down from an upwardly revised reading of 98.3 in June.
Forecasts ranged from a low of 90.0 to a high of 100.0. The consensus forecast was 95.7. The historic low reading at 25.0 was measured during the Great Recession in February 2009.
“Large declines were experienced in Michigan, Florida, Texas and California, no doubt a result of the resurgence of COVID-19,” said Lynn Franco, Senior Director of Economic Indicators at The Conference Board. “Looking ahead, consumers have grown less optimistic about the short-term outlook for the economy and labor market and remain subdued about their financial prospects.”
“Such uncertainty about the short-term future does not bode well for the recovery, nor for consumer spending.”
Consumers’ views of present-day conditions improved in July. The Present Situation Index — which is based on consumers’ assessment of current business and labor market conditions — rose from 86.7 to 94.2.
However, consumers were less optimistic about the short-term outlook. The Expectations Index — gauging consumers’ short-term outlook for income, business, and labor market conditions — fell from 106.1 in June to 91.5 in July.
The percentage of consumers claiming business conditions are “good” was virtually unchanged at 17.3%, while those claiming business conditions are “bad” fell from 42.5% to 39.1%. Consumers’ appraisal of the job market also improved. The percentage of consumers saying jobs are “plentiful” rose from 20.5% to 21.3%, while those claiming jobs are “hard to get” declined from 23.3% to 20.0%.
The Consumer Confidence Survey is conducted monthly and based on a probability-design random sample for the Conference Board by Nielsen. The cutoff date for the preliminary results was June 18.