Despite the July improvement in confidence, the overall Consumer Confidence Index remains at historically low levels, reports Lynn Franco, director of economic indicators at The Conference Board. "Consumers' attitude regarding current conditions was little changed in July, but their short-term expectations, which had declined last month, bounced back."
"However, while consumers expressed greater optimism about short-term business and employment prospects, they have grown more pessimistic about their earnings. Given the current economic environment — in particular the weak labor market — consumer confidence is not likely to gain any significant momentum in the coming months, " Franco said.
Consumers' appraisal of current conditions eased in July, the July report said. Those claiming business conditions are "good" declined to 13.8 percent from 14.2 percent, while those saying business conditions are "bad" decreased to 34.2 percent from 35.9 percent.
Consumers' assessment of the labor market was also mixed. Those stating jobs are “hard to get" declined to 40.8 percent from 41.2 percent, while those claiming jobs are "plentiful" decreased to 7.8 percent from 8.3 percent.
The Conference Board Consumer Confidence Index, which had declined in June, improved slightly in July. The Index now stands at 65.9 (1985=100), up from 62.7 in June. The Expectations Index improved to 79.1 from 73.4. The Present Situation Index, however, decreased slightly to 46.2 from 46.6 a month ago.
The monthly Consumer Confidence Survey, based on a probability-design random sample, is conducted for The Conference Board by Nielsen. The cutoff date for the preliminary results was July 19.
Consumers were generally more optimistic about the short-term outlook in July, the Conference Board said. The percentage of consumers expecting business conditions to improve over the next six months rose to 18.9 percent from 16.0 percent, while those anticipating business conditions will worsen decreased to 14.6 percent from 15.8 percent. Consumers’ outlook for the labor market was also more upbeat in July. Those expecting more jobs in the months ahead increased to 17.6 percent from 14.8 percent, while those anticipating fewer jobs edged down to 20.3 percent from 20.8 percent.
The proportion of consumers expecting an increase in their incomes, however, declined to 14.2 percent from 15.3 percent.