US consumer confidence plunges in June

ABS-CBN News

Posted at Jun 24 2008 10:58 PM | Updated as of Jun 25 2008 06:58 AM

Agence France-Presse

WASHINGTON - US consumer confidence plunged in June amid growing concerns about jobs and the economy that have slashed expectations to an all-time low, the Conference Board reported Tuesday.

The business research firm said its index of consumer confidence, which has slid all year, fell to 50.4 points in June from 58.1 points in May.

The decline was much sharper than the expected consensus forecast of a drop to 57.0 points.

The June consumer confidence reading was the fifth-weakest since the Conference Board started the index in August 2003.

"Consumers' assessment of present-day conditions continues to grow more negative and suggests the economy remains stuck in low gear," said Lynn Franco, consumer research director at the Conference Board.

"Looking ahead, consumers' economic outlook is so bleak that the expectations index has reached a new all-time low. Perhaps the silver lining to this otherwise dismal report is that consumer confidence may be nearing a bottom," she said.

Both major components of the index tumbled sharply in June. The present situation index, which measures how consumers feel about current conditions, fell to 64.5 from 74.2 in May.

The expectations index, which measures consumers' outlook for the next six months, fell to 41.0 from 47.3 in May.

Looking at current conditions, the monthly survey of 5,000 households found the number of consumers claiming business conditions are "bad" increased to 32.5 percent from 29.7 percent, while those saying business conditions are "good" declined to 11.5 percent from 13.0 percent.

Consumers also were more pessimistic about employment. Those saying jobs are "hard to get" climbed to 30.5 percent from 28.3 percent, while those claiming jobs are "plentiful" slid to 14.1 percent from 16.1 percent.

On a six-month outlook, consumers expecting business conditions to deteriorate rose to 33.9 percent from 32.9 percent. Only 8.8 percent said they anticipated improved business conditions, down from 10.6 percent in May.

Consumers also were increasingly more pessimistic about jobs and incomes in the short term.

Those expecting fewer jobs in the months ahead increased to 35.5 percent from 32.3 percent, while those foreseeing more jobs fell to 8.0 percent from 9.0 percent.

The number of consumers expecting their incomes to increase declined to 12.3 percent from 14.1 percent.