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Economy in Brief

Consumer Confidence in June Again Fell Surprising Hard
by Tom Moeller June 24, 2008

The Conference Board reported that consumer confidence this month fell by 13.3% m/m after a 7.5% drop in May. The decline nearly equaled the largest since 2005 and it more-than-doubled the decline that was generally expected.

The June decline left confidence at its lowest level since early-1992.

The present conditions index fell 13.1% m/m to the lowest level since 2003.

Just 11.5% of respondents saw business conditions as good, the lowest since early-1992. Jobs as plentiful were seen by a much lessened 14.1% while 30.5% felt that jobs were hard to get, the highest since mid-2004.

The expectations component of the index fell a notably hard 13.3% m/m to a record low. The percentage of respondents expecting business conditions to worsen in six-months rose to 33.9% and the percentage expecting income to decline rose to 15.9%. Only 8.0% of respondents expected more jobs.

Expectations for the inflation rate held steady last month at 7.7%. That was the highest level in the series' 20 year history.

Consumer Confidence Surveys: Can They Help Us Forecast Consumer Spending in Real Time? is a 2006 article from the Federal Reserve Bank of Philadelphia. It answers "no" and it is available here.

Conference Board  (SA, 1985=100) June May Y/Y % 2007 2006 2005
Consumer Confidence Index 50.4 58.1 -52.1 103.4 105.9 100.3
  Present Situation 64.5 74.2 -50.3 128.8 130.2 116.1
  Expectations 41.0 47.3 -53.8 86.4 89.7 89.7
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