The Conference Board Consumer Confidence Index posted a sharp decline in August. The Index now stands at 99.6 (1985=100), down from 107.0 in July. In fact, the Index is at the lowest level this year, and the decline was the sharpest one month decline seen since Hurricane Katrina.
According to Lynn Franco, Director of The Conference Board Consumer Research Center, less favorable business conditions coupled with a less favorable job scenario led to the decline.
The Present Situation Index decreased from 134.2 to 123.4. And the Expectations Index declined from 88.9 last month to 83.8 in August.
Consumers' overall assessment of current conditions was significantly less favorable in August. Those claiming conditions are "good" decreased from 27.3 percent to 26.1 percent. Those claiming conditions are "bad" increased from 15.0 percent to 16.7 percent. Labor market conditions were also less favorable. Consumers saying jobs are "plentiful" decreased from 28.6 percent to 24.4 percent, while those claiming jobs are "hard to get" increased from 19.6 in July to 21.1 percent in August.
Consumers' outlook for the next six months turned more negative in August. Those anticipating business conditions to worsen increased from 10.9 percent to 12.9 percent. Those expecting business conditions to improve edged down from 16.1 percent to 15.9 percent.
The outlook for the labor market was also less favorable. Those expecting more jobs to become available in the coming months decreased from 14.3 percent in July to 14.0 percent. Those expecting fewer jobs increased from 16.5 percent to 18.3 percent. The proportion of consumers anticipating their incomes to increase in the months ahead declined from 18.3 percent to 17.7 percent.
The Consumer Confidence Survey is based on a representative sample of 5,000
August 2006 Consumer Confidence Index The Conference Board