Conference Board Reports Slight Increase in Consumer Confidence

The Conference Board Consumer Confidence Index, which had declined in June, improved slightly in July, the Conference Board reports. The Index now stands at 59.5 (1985=100), up from 57.6 in June. The Present Situation Index decreased to 35.7 from 36.6. The Expectations Index rose to 75.4 from 71.6 last month.

“Consumer confidence posted a modest gain in July, the result of an improvement in consumers’ short-term outlook.  Consumers’ appraisal of current business and employment conditions, however, was less favorable as concerns about the labor market continue to weigh on consumers’ attitudes. Overall, consumers remain apprehensive about the future, but some of the concern expressed last month has abated,” said Lynn Franco, Director of The Conference Board Consumer Research Center.

Consumers' assessment of current day conditions weakened further in July. the Board said. Those stating business conditions are “good” decreased to 13.4 percent from 13.7 percent, while those claiming business conditions are “bad” increased to 39.0 percent from 38.4 percent. Consumers’ appraisal of the job market was also less favorable. Those claiming jobs are “hard to get” increased to 44.1 percent from 43.2 percent, while those stating jobs are “plentiful” remained unchanged at 5.1 percent.

The monthly Consumer Confidence Survey, based on a probability-design random sample, is conducted for The Conference Board by The Nielsen Company, a leading global provider of information and analytics around what consumers buy and watch. The cutoff date for July’s preliminary results was July 14.

Consumers’ short-term outlook improved moderately in July. the Conference Board said. The proportion of consumers expecting business conditions to improve over the next six months increased to 17.7 percent from 16.5 percent. However, those anticipating business conditions will worsen also increased, to 15.2 percent from 14.9 percent.

Consumers were also mixed about the outlook for the labor market over the next six months. Those anticipating more jobs in the months ahead increased to 16.7 percent from 13.8 percent. However, those expecting fewer jobs also increased to 21.8 percent from 20.7 percent. The proportion of consumers anticipating an increase in their incomes rose to 15.7 percent from 14.1 percent.

The Conference Board Measure of CEO Confidence, released earlier this month, which had risen in the first quarter of 2011, retreated sharply in the second quarter. The Measure now reads 55, down from 67 last quarter (a reading of more than 50 points reflects more positive than negative responses).

“CEO confidence cooled considerably in the second quarter, a reflection of a sluggish U.S. economy. Looking ahead, expectations are that this slow pace of economic growth will continue. Regarding the outlook for profits over the next 12 months, the news was a bit more favorable, with about 70 percent of CEOs anticipating profit increases,” says Franco.

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