Consumer confidence in the U.S. has continued to deteriorate in the month of June, according to a report released by the Conference Board on Tuesday, with the consumer confidence index falling for the fourth consecutive month.
The report showed that the consumer confidence index dropped to 62.0 in June from a downwardly revised 64.4 in May. Economists had expected the index to slip to 63.5 from the 64.9 originally reported for the previous month.
Rob Carnell, chief international economist at ING, noted that there is "some evidence that the looming fiscal cliff is beginning to weigh on household sentiment."
"Such confidence readings are consistent with a much weaker rate of real personal spending growth than the 2.7% rate recorded in [the first quarter]," he added.
The decrease by the headline index came as consumers were more pessimistic about the short-term outlook, with the expectations index falling to 72.3 in June from 77.3 in May.
Consumers expecting business conditions to improve over the next six months fell to 15.5 percent from 16.6 percent, while those expecting business conditions to worsen rose to 16.2 percent from 12.9 percent.
Meanwhile, the Conference Board said the outlook for the labor market was mixed. While consumer anticipating more jobs in the months ahead dropped to 14.1 percent from 15.4 percent, those expecting fewer jobs also slid to 20.6 percent from 21.5 percent.
The report also showed that the percentage of consumers expecting to see an increase in their incomes fell to 14.8 percent from 15.7 percent.
On the other hand, the present situation index climbed to 46.6 in June from 44.9 in May, as consumers saying business conditions are "good" increased to 14.9 percent from 13.6 percent. Consumers saying business conditions are "bad" also edged up to 35.1 percent from 34.7 percent.
The Conference Board also said that consumers saying jobs are "hard to get" rose to 41.5 percent from 40.9 percent, while those saying jobs are "plentiful" crept up to 7.8 percent from 7.5 percent.
Lynn Franco, Director of Economic Indicators at the Conference Board, said, "The improvement in the Present Situation Index, coupled with a moderate softening in consumer expectations, suggests there will be little change in the pace of economic activity in the near-term."
Friday morning, Thomson Reuters and the University of Michigan are scheduled to release their revised report on consumer sentiment in the month of June.
The preliminary report showed that the consumer sentiment index fell to 74.1 in June from the final May reading of 79.3. The pullback by the index came after it reached its highest level since October of 2007 in the previous month.
by RTT Staff Writer
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