Consumer Confidence Index Softens, Lowest Level Since November 2001
Press release from the issuing company
August 27, 2002 -- The Conference Board's Consumer Confidence Index, after a dip in July, declined again in August. The Index now stands at 93.5 (1985=100), down from 97.4 in July. The Present Situation Index declined from 99.4 in July to 92.0 in August. The Expectations Index dropped from 96.1 to 94.5.
The Consumer Confidence Survey is based on a representative sample of 5,000 U.S. households. The monthly survey is conducted for The Conference Board by NFO WorldGroup, a member of The Interpublic Group of Companies (NYSE: IPG).
"The Consumer Confidence Index is now at its lowest level since November 2001," says Lynn Franco, Director of The Conference Board's Consumer Research Center. "The month-to-month decline in the Present Situation Index is a strong signal that business conditions have yet to turn around. It also suggests that consumer spending is not likely to gain momentum any time soon. While consumer expectations are also down, they remain at levels that historically point to a continued, but slow, economic expansion."
Consumers' assessment of the present situation showed no improvement from July. Those rating business conditions as "good" fell from 20.2 percent in July to 16.6 percent in August. Those rating conditions as "bad" was virtually unchanged -- 22.3 percent in August, compared to 22.1 percent in July. Consumers reporting jobs were plentiful declined from 18.8 percent to 17.2 percent, but those claiming jobs are hard to get remained unchanged at 23.9 percent.
Consumers' expectations for the next six months were mixed. While a greater percentage expected an improvement in business conditions in the coming months -- 20.8 percent in July versus 22.1 percent in August -- a greater proportion also held the opposite view.
The employment outlook was also less favorable. More consumers expect fewer jobs to become available, 17.0 percent in July, compared with 18.1 percent in August. About the same, 17.3 percent in July versus 17.5 percent in August, expect more jobs to become available. As for income prospects, 21.5 percent of consumers anticipate an increase, up from 20.1 percent last month.
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