The Conference Board says that its “Consumer Confidence Index deteriorated by 5.4 points in June, falling to 93.0 from 98.4 in May. The Present Situation Index – based on consumers’ assessment of current business and labor market conditions – fell 6.4 points to 129.1. The Expectations Index – based on consumers’ short-term outlook for income, business, and labor market conditions – fell 4.6 points to 69.0, substantially below the threshold of 80 that typically signals a recession ahead … June’s retreat in confidence was shared by all age groups and almost all income groups. It was also shared across all political affiliations, with the largest decline among Republicans.”
Stephanie Guichard, Senior Economist with The Conference Board, said in a prepared statement, “The decline was broad-based across components, with consumers’ assessments of the present situation and their expectations for the future both contributing to the deterioration. Consumers were less positive about current business conditions than May. Their appraisal of current job availability weakened for the sixth consecutive month but remained in positive territory, in line with the still-solid labor market. The three components of the Expectations Index—business conditions, employment prospects, and future income—all weakened. Consumers were more pessimistic about business conditions and job availability over the next six months, and optimism about future income prospects eroded slightly.”
KC’s View:
My question is this: How could consumer confidence and expectations not decline? There is way too much instability and tumult out there at the moment to give anyone a sense of reassurance.
Most importantly, at least for the MNB audience: To the best of their abilities, retailers need to work to provide some sense of stability to their shoppers by being transparent and specific in their communications. (See Stew Leonard’s story, above.)
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