Consumer Confidence Index Plunges to Lowest Level since 1992
Consumer Confidence Index Plunges to Lowest Level since 1992
The Conference Board’s measure of U.S. consumer confidence plunged to 50.4 in June, the lowest level since February 1992, and well below market forecasts. May’s index was revised up slightly to 58.1 from an initial estimate of 57.2.
The report showed declines in both the present situation and expectations indices. The present situation index fell to 64.5 from 74.2, while the expectations index slipped to 41 from 47.3. The jobs-hard-to-get index edged up to 30.5, while the jobs plentiful index edged down two points to 14.1. The difference between the jobs-plentiful and jobs-hard-to-get indices came in at -16.4 compared to -12.2 in May, consistent with a further weakening in labour market conditions. The one-year inflation forecast remained at a record high 7.7%.
The combination of falling home prices (see below), a softening labour market and rising gasoline prices is delivering a triple-whammy to U.S. consumers and continued to weigh on confidence in June.
While these factors are keeping some consumers on the sidelines, the initial receipt of the tax rebate cheques in May bolstered retail activity and we expect they will support a steady acceleration in consumption spending throughout the second and third quarters.
For monetary policy, the Fed’s focus appears to have shifted to the inflation outlook and the persistent rise in the one-year inflation forecasts evident in the Conference Board’s survey will keep policymakers wary about a pick-up in inflation expectations.
Record year-over-year drop in Case-Shiller house price index
The Case-Shiller 20-city house price index declined 1.4% in April and was 15.3% lower than a year earlier. The decline was modestly less than expected by forecasters, although it still marked the largest year-over-year drop on record.
RBC Financial Group
http://www.rbc.com
The statements and statistics contained herein have been prepared by the Economics Department of RBC Financial Group based on information from sources considered to be reliable. We make no representation or warranty, express or implied, as to its accuracy or completeness. This report is for the information of investors and business persons and does not constitute an offer to sell or a solicitation to buy securities.
If you enjoyed this post, please consider to leave a comment or subscribe to the feed and get future articles delivered to your feed reader.
Comments
No comments yet.
Sorry, the comment form is closed at this time.