Those expecting business conditions to improve over the next six months decreased to 11.8 percent from 17.9 percent, while those expecting business conditions to worsen surged to 24.6 percent from 16.1 percent, the Conference Board reports.
The influential Conference Board Consumer Confidence Index, which had improved slightly in July, plummeted in August. The Index now stands at 44.5 (1985=100), down from 59.2 in July. The Present Situation Index decreased to 33.3 from 35.7. The Expectations Index decreased to 51.9 from 74.9 last month.
"Consumer confidence deteriorated sharply in August, as consumers grew significantly more pessimistic about the short-term outlook. The index is now at its lowest level in more than two years (April 2009, 40.8). A contributing factor may have been the debt ceiling discussions since the decline in confidence was well underway before the S&P downgrade. Consumers' assessment of current conditions, on the other hand, posted only a modest decline as employment conditions continue to suppress confidence, " said Lynn Franco, director of The Conference Board Consumer Research Center.
The monthly Consumer Confidence Survey, based on a probability-design random sample, is conducted for The Conference Board by The Nielsen Company. The cutoff date for the preliminary results was August 18th.
Consumers' appraisal of present-day conditions weakened further in August, the Conference Board reports. Consumers claiming business conditions are "bad" increased to 40.6 percent from 38.7 percent, while those claiming business conditions are "good" inched up to 13.7 percent from 13.5 percent.
Consumers' assessment of employment conditions was more pessimistic than last month. Those claiming jobs are "hard to get" increased to 49.1 percent from 44.8 percent, while those stating jobs are "plentiful" declined to 4.7 percent from 5.1 percent.
Consumers' short-term outlook deteriorated sharply in August, the Conference Board said. Those expecting business conditions to improve over the next six months decreased to 11.8 percent from 17.9 percent, while those expecting business conditions to worsen surged to 24.6 percent from 16.1 percent.
Consumers were also more pessimistic about the outlook for the job market, the Conference Board said. Those anticipating more jobs in the months ahead decreased to 11.4 percent from 16.9 percent, while those expecting fewer jobs increased to 31.5 percent from 22.2 percent. The proportion of consumers anticipating an increase in their incomes declined to 14.3 percent from 15.9 percent.