Consumer Confidence Index Falls in August
August 31, 2004
The Conference Board’s Consumer Confidence Index, which had been on the rise since April, declined in August. The Index now stands at 98.2 (1985=100), down from 105.7 in July. The Expectations Index dropped to 96.6 from 105.3. The Present Situation Index fell to 100.7 from 106.4.
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 TNS NFO. TNS NFO is one of the TNS Group of companies (LSE: TNN). The cutoff date for August’s preliminary results was August 24th.
Consumers Turn Cautious Again
“The slowdown in job growth has curbed consumers’ confidence,” says Lynn Franco, Director of The Conference Board’s Consumer Research Center. “The level of consumer optimism has fallen off and caution has returned. Until the job market and pace of hiring picks up, this cautious attitude will prevail.”
Consumers’ assessment of current conditions was less upbeat than last month. Those saying business conditions are “good” declined to 23.2 percent from 25.2 percent. Those claiming conditions are “bad” rose to 20.1 percent from 19.1 percent. Consumers saying jobs are “plentiful” decreased to 18.1 percent from 19.7 percent. Those claiming jobs are “hard to get” was virtually unchanged at 25.8 percent, compared to 25.7 percent in July.
Consumers have reduced expectations for the next six months. Those anticipating conditions to worsen increased to 8.8 percent from 7.1 percent. Those expecting business conditions to improve declined to 20.1 percent from 23.0 percent last month.
The employment outlook for the next six months was also less favorable. Consumers expecting fewer jobs increased to 15.4 percent from 13.5 percent. Those anticipating more jobs to become available fell to 16.2 percent from 19.5 percent. Consumers expecting their incomes to improve in the months ahead rose to 19.3 percent from 18.0 percent last month.
Source: August 2004 Consumer Confidence Index, The Conference Board.