Consumer confidence falls in CB index
July 26, 2005
The Conference Board index of consumer sentiment shows that consumer confidence in the United States fell in July as people said that they were less optimistic about their job prospects.
In a report issued Tuesday, figures showed that the index of consumer sentiment fell from a revised 106.2 in June, a three-year high, to 103.2 in June. Analysts had expected the July figure to be 106.0.
While 22.5 percent of the consumers surveyed said that jobs were “plentiful”, the same figures as in June, the number of those saying that jobs were “hard to get” rose from 22.5 percent in June to 23.8 percent in July.
Analysts still characterize confidence as “healthy” and say that the decline is not a cause for worry.
While changes in confidence generally have been seen as leading indicators of changes in economic growth - when confidence grows, so does the economy - because consumer spending accounts for two-thirds of economic activity in the United States, recent years have seen the correlation weaken to the extent that consumers now are more likely to say that things are getting worse but still go out and spend their money for large purchases such as cars and houses.