The Conference Board, a private research group, reported the Consumer Confidence Index dropped to 50.4 in July, down 3.9 points from the revised 54.3 in June. This follows last month’s drop of almost 10-points from 62.7 in May. This report is raising questions about the recovering economy and the back-to-school season. One part of the Consumer Confidence Index, which measures how people feel about the economy now, declined to 26.1, from 26.8. The other barometer, which measures outlook over the next six months, declined to 66.6, from 72.7 last month. The index had been recovering since hitting an all-time low of 25.3 in February 2009. Economists are concerned because consumer spending accounts for about 70 percent of U.S. economic activity and is critical to a strong recovery. A reading above 90 indicates the economy is on solid footing.
The Conference Board survey, which was mailed to 5,000 households from July 1 to July 21, showed the assessment of the job market was more negative than the previous month. Those claiming that jobs are “hard to get” increased to 45.8 from 43.5 percent, while those saying jobs are “plentiful” remained unchanged at 4.3 percent. Consumers are more negative about future job prospects with those expecting more jobs in the months ahead declining to 14.3 percent from 16.2 percent and those anticipating fewer jobs rose to 21.1 percent from 20.1 percent. The proportion of consumers expecting an increase in their incomes declined to 10 percent from 10.6 percent.