U.S. Consumer Confidence Slips in July Amid Surge in Coronavirus Infections

Consumer confidence in the U.S. slipped in July as a spike in coronavirus cases prompted renewed restrictions across the country, according to data from The Conference Board released Tuesday.

The consumer confidence index fell to 92.6 in July from an upwardly revised 98.3 in June. Economists polled by Dow Jones Newswires expected the reading to be at a slightly higher level of 94.3.

“Consumers have grown less optimistic about the short-term outlook for the economy and labor market and remain subdued about their financial prospects,” said Lynn Franco, senior director of economic indicators at the Conference Board.

Large declines in consumer confidence were experienced in Michigan, Florida, Texas and California, no doubt a result of the resurgence of Covid-19, she said. In February, before the Covid-19 pandemic hit the U.S., the index stood at 132.6.

The present situation index, which reflects consumers assessment of current business and labor market conditions, improved to 94.2 from 86.7 the previous month. The expectations index, which gauges short-term outlook for income, business and labor market conditions, fell to 91.5 in July from 106.1 in June.

The percentage of consumers claiming that business conditions are good was relatively unchanged at 17.3%, while those claiming business conditions are bad decreased to 39.1% from 42.5%.

Americans, however, were less optimistic about the short-term outlook. The percentage of consumers expecting business conditions will improve over the next six months declined sharply to 31.6% from 42.4%, while those expecting business conditions will worsen increased to 19.3% from 15.2%.

“Such uncertainty about the short-term future does not bode well for the recovery, nor for consumer spending,” Ms. Franco said.
Source: Dow Jones