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Consumer Confidence Collapses Massively In June
Vincent Fernando, CFA
Business Insider
Tuesday, June 29, 2010
The Conference Board’s consumer confidence index for June dropped sharply to 52.9, which is a horrible
underperformance of expectations given that consensus had forecast a reading of 62.
It also disappoints bulls after three consecutive months of improvement previously.
To some degree a pullback was expected as the economy has been long forecast to slow as
we enter the second half of 2010, but this shift in consumer sentiment has clearly been surprisingly severe.
Conference Board:
The Index now stands at 52.9 (1985=100), down from 62.7 in May.
The Present Situation Index decreased to 25.5 from 29.8.
The Expectations Index declined to 71.2 from 84.6 last month.
(ARTICLE CONTINUES BELOW)
Consumer Confidence Collapses Massively In June
Says Lynn Franco, Director of The Conference Board Consumer Research Center: “Consumer confidence,
which had posted three consecutive monthly gains and appeared to be gaining some traction,
retreated sharply in June. Increasing uncertainty and apprehension about the future state of the economy
and labor market, no doubt a result of the recent slowdown in job growth, are the primary reasons for the
sharp reversal in confidence. Until the pace of job growth picks up, consumer confidence is not likely to pick up.”
Consumers’ short-term outlook, which had improved significantly last month, turned more pessimistic in June.
Those anticipating an improvement in business conditions over the next six months decreased to 17.2 percent
from 22.8 percent, while those expecting conditions will worsen rose to 14.9 percent from 11.9 percent.
Consumers were also much less optimistic about future job prospects. The percentage of consumers
anticipating more jobs in the months ahead decreased to 16.0 percent from 20.2 percent, while those
anticipating fewer jobs increased to 20.8 percent from 17.8 percent. The proportion of consumers
anticipating an increase in their incomes declined to 10.6 percent from 11.4 percent.
Vincent Fernando, CFA
Business Insider
Tuesday, June 29, 2010
The Conference Board’s consumer confidence index for June dropped sharply to 52.9, which is a horrible
underperformance of expectations given that consensus had forecast a reading of 62.
It also disappoints bulls after three consecutive months of improvement previously.
To some degree a pullback was expected as the economy has been long forecast to slow as
we enter the second half of 2010, but this shift in consumer sentiment has clearly been surprisingly severe.
Conference Board:
The Index now stands at 52.9 (1985=100), down from 62.7 in May.
The Present Situation Index decreased to 25.5 from 29.8.
The Expectations Index declined to 71.2 from 84.6 last month.
(ARTICLE CONTINUES BELOW)
Consumer Confidence Collapses Massively In June
Says Lynn Franco, Director of The Conference Board Consumer Research Center: “Consumer confidence,
which had posted three consecutive monthly gains and appeared to be gaining some traction,
retreated sharply in June. Increasing uncertainty and apprehension about the future state of the economy
and labor market, no doubt a result of the recent slowdown in job growth, are the primary reasons for the
sharp reversal in confidence. Until the pace of job growth picks up, consumer confidence is not likely to pick up.”
Consumers’ short-term outlook, which had improved significantly last month, turned more pessimistic in June.
Those anticipating an improvement in business conditions over the next six months decreased to 17.2 percent
from 22.8 percent, while those expecting conditions will worsen rose to 14.9 percent from 11.9 percent.
Consumers were also much less optimistic about future job prospects. The percentage of consumers
anticipating more jobs in the months ahead decreased to 16.0 percent from 20.2 percent, while those
anticipating fewer jobs increased to 20.8 percent from 17.8 percent. The proportion of consumers
anticipating an increase in their incomes declined to 10.6 percent from 11.4 percent.
