U.S. Consumer Confidence Improves to 51.9 in July
The Conference Board's consumer confidence index for July improved to 51.9 in Tuesday's report, against expectations of a slight decline to 50.0. Some economists were expecting such an improvement following the upward revisions in the Reuters/U of Michigan sentiment index last week, which bumped up to 61.2 from the preliminary 56.6 level.
One-year inflation expectations fell back one-tenth of a percent to 7.6%, following two months at a record-high 7.7%.
The previous month's headline reading of 50.4 was revised upwards to 51.0. One year ago, the index stood at 111.9.
The expectations category improved to 43.0, up from 41.4 in June, but the present situation component fell one-tenth to 65.3.
"Consumers' assessment of current conditions was little changed, suggesting there has been no significant improvement, nor significant deterioration, in business or labor market conditions," said Lynn Franco, director of the Conference Board's Consumer Research Center.
Consumers' appraisal of the job market continued to be pessimistic in June, with those saying jobs were "hard to get" increasing to 30.3% from 29.7% and those claiming jobs were "plentiful" decreasing to 13.5% from 14.1%.
Respondents claiming business conditions were "bad" increased to 32.8% from 31.9% while those claiming business conditions were "good" increased to 13.1% from 11.5%.
In the labour market, consumers expecting fewer jobs in the months ahead rose to 37.1% from 35.7%, while those anticipating more jobs rose to 8.2% from 8.0%. Meanwhile, the proportion of consumers expecting their incomes to increase saw a gain to 14.2% from 13.1%.
"Looking ahead, while consumers remain extremely grim about short-term prospects, the modest improvement in expectations, often a harbinger of economic times to come, bears careful watching over the next few months," Franco added.
Before the economic turmoil began, the Conference Board's consumer confidence index reached an annual high of 111.9 in June 2007. The subprime crisis created a four-month decline to 87.0 in November before rebounding by a few points prior to the holidays. The index then resumed its downward trend in January, falling to 50.4 from 87.9 in the first six months of 2008.
By Patrick McGee and edited by Nancy Girgis