Hold that relief: Consumer confidence dipped in June

NEW YORK — Mounting job losses and other economic realities caught up with Americans in June, pushing down a key barometer of consumer sentiment after a streak of gains built on glimmers of hope.

Some economists say the reality check offered by Tuesday’s report from the New York-based Conference Board may not augur well for spending in the critical months ahead.

The Conference Board said its Consumer Confidence Index now stands at 49.3, down from its revised May level of 54.8.

The drop coincided with mixed messages in the housing market. A report from the Treasury Department showing foreclosures jumped in the first quarter compared with 2008’s fourth quarter. But a key housing price index showed price declines moderating.

Job security — a key factor in shoppers’ willingness and ability to spend — continued to plague consumers surveyed by the Conference Board. And the Labor Department, which reports June’s job data Thursday, is expected to show unemployment climbed.

“Consumers are making a more somber and accurate assessment of the economy and their own financial position,” said Mark Vitner, senior economist at Wachovia. “Consumers may be thinking less bad is not good enough.”

Because consumer spending accounts for more than two-thirds of economic activity in the United States, economists and investors watch it closely. The Dow Jones industrials fell 82.38 points, or 0.99 percent, to end Tuesday at 8,447.0 and reverse a small gain in the morning before the Conference Board report came out.

Both components of the consumer confidence gauge fell this month. The Present Situation Index of how shoppers feel now about the economy declined to 24.8 from 29.7 in May. And the board’s Expectations Index, shoppers’ outlook for the next six months, dropped to 65.5 from 71.5.

Lynn Franco, director of The Conference Board Consumer Research Center, said in a statement that the decline in consumers’ view of the current economy implies “that economic conditions, while not as weak as earlier this year, are nonetheless weak.”

Consumer sentiment has risen markedly from its new historic low of 25.3 in February. But confidence is still well below what’s considered healthy. A reading above 90 means the economy is on solid footing. Above 100 signals strong growth.

Economists surveyed by Thomson Reuters had projected confidence would hold steady at 55 this month after surges in April and May helped by a stock market rally that has now shown signs of fizzling.

In May, the figure zoomed 14 points past economists’ expectations to its highest level since September, when it was 61.4. Economists surveyed by Thomson Reuters had expected a reading of 42.3 last month.

More in Herald Business Journal

Amazon lists 20 finalists for HQ2, and no, we aren’t on it

Los Angeles was the only West Coast city listed. They seem to like the nation’s capital.

Strange and wonderful creatures come through door of Bothell clinic

At the Center for Bird and Exotic Animal Medicine, vets treat snakes, hedgehogs and even kangaroos.

Don’t take economic forecasts to the bank — or the casino

Air travel delays could spur a rebirth of passenger rail service.

Emirates orders 20 more Airbus A380 jumbos, saving program

The Dubai carrier also has options to buy 16 more. The program seems safe until 2029.

How do you retrieve an errant Boeing 737 from a muddy slope?

Turkish authorities used cranes to lift a plane that skidded off a runway.

Amanda Strong (left) tries on an Angel of the Winds Arena hat as she and Courtney Brown hand out gift bags after the renaming ceremony Dec. 13 in Everett. The new name replaces the Xfinity name. (Andy Bronson / Her file)
Angel of the Winds to break ground on $60M casino expansion

“We think we’re on the cusp of becoming a major resort.”

House passes bill aimed at lowering gender wage gap

The bill would hinder employers from retaliating against female workers who ask about others’ pay.

Planemaker joins forces with auto-industry supplier Adient

The new venture poses a threat to Zodiac Aerospace and Rockwell Collins

In this Dec. 20, 2017, photo, a clerk reaches to a shelf to pick an item for a customer order at the Amazon Prime warehouse, in New York. (AP Photo/Mark Lennihan, File)
Amazon’s potential HQ2 sites leaves many cities disappointed

Associated Press Amazon’s move to whittle its list for a second headquarters… Continue reading

Most Read