Consumer Confidence Drops in August

The monthly Consumer Confidence Survey , based on a probability-design random sample, is conducted for The Conference Board by The Nielsen Company, a leading global provider of information and analytics around what consumers buy and watch. The cutoff date for the preliminary results was Aug. 18.

“Consumer confidence deteriorated sharply in August, as consumers grew significantly more pessimistic about the short-term outlook,” said Lynn Franco, director of The Conference Board Consumer Research Center.“The index is now at its lowest level in more than two years (April 2009, 40.8). A contributing factor may have been the debt ceiling discussions since the decline in confidence was well underway before the S&P downgrade. Consumers’ assessment of current conditions, on the other hand, posted only a modest decline as employment conditions continue to suppress confidence.”

Consumers’ appraisal of present-day conditions weakened further in August. Consumers claiming business conditions are “bad” increased to 40.6% from 38.7%, while those claiming business conditions are “good” inched up to 13.7% from 13.5%. Consumers’ assessment of employment conditions was more pessimistic than last month. Those claiming jobs are “hard to get” increased to 49.1% from 44.8%, while those stating jobs are “plentiful” declined to 4.7 percent from 5.1 percent.

Consumers’ short-term outlook deteriorated sharply in August, the group said. Those expecting business conditions to improve over the next six months decreased to 11.8% from 17.9%, while those expecting business conditions to worsen surged to 24.6% from 16.1%. The proportion of consumers anticipating an increase in their incomes declined to 14.3% from 15.9%.