Consumer confidence took a dive in August, falling to its lowest level this year, The Conference Board said Tuesday in its widely watched monthly survey.
The index, which rose modestly in July to 107, fell to 99.6 as more respondents expressed concerns about the job market and business conditions down the road.
“Less favorable business conditions, coupled with a less favorable job scenario, have resulted in the largest one-month decline in confidence since Hurricane Katrina last year,” said Lynn Franco, director of The Conference Board Consumer Research Center. “Looking ahead, the glass remains half empty as consumers are growing increasingly more pessimistic about the short-term outlook.”
For manufacturers, a less optimistic consumer could lead to a slowdown in oders for big-ticket items. That said, surveys such as this - based on a representative sample of 5,000 U.S. households - have their critics, who argue that what consumers say and what they actually do are two different things.Consumers’ overall take on current conditions was much less favorable in August, with those claiming conditions are “good” dropping to 26.1 percent from 27.3 percent. At the same time, those saying conditions are “bad” increased to 16.7 percent from 15 percent.
On the jobs front, the percentage of those surveyed saying jobs are “plentiful” fell to 24.4 from 28.6, while those saying jobs are “hard to find” rose to 21.1 percent from 19.6 in July.
Perhaps most troubling was the outlook for the next six months, the group’s so-called expectations index. Those expecting more jobs to become available in the coming months decreased to 14 percent from 14.3 percent in July, and the percentage of consumers expecting their incomes to rise in the months ahead fell to 17.7 from 18.3.