Consumers’ confidence drops again
Americans’ view of economy falls to 7-month low
NEW YORK — If you are an American consumer, why would you be confident?
Following a string of bad news that threatens the painfully slow economic recovery, consumer confidence fell to a seven-month low in June on continuing worries about high unemployment and stagnating wages, according to a report released yesterday by a private research group.
The Conference Board’s Consumer Confidence Index slipped to 58.5 in June. That’s down from a revised 61.7 in May, which marked an almost six-point drop.
“Americans still feel like they’re in a recession,’’ said C. Britt Beemer, chairman of America’s Research Group. “They feel like they’re driving in a car and getting hit by all sides.’’
A reading of 90 indicates a healthy economy on the index, which measures how Americans feel about business conditions, the job market, and the next six months. But the index hasn’t approached that level since the recession began in December 2007.
“Consumers are growing increasingly worried about the near-term economic outlook,’’ said Mark Vitner, senior economist at Wells Fargo.
Isaac Burrows, 24, who works on commission as a salesman at a Clarks Shoes store in downtown Indianapolis, is concerned. A few years ago, he could sell $10,000 worth of shoes a week; now he is lucky if he can sell half that.
“There haven’t been any real signs that would give you that confidence,’’ Burrows said.
Still, economists had expected the confidence index to edge up because consumers are paying less at the pump. But that did not boost shoppers’ mood.
Consumers had been hurt by rising gas prices that neared $4 per gallon in late April and early May. But since the Memorial Day weekend, gas prices have fallen to a national average of $3.57 per gallon.
Lynn Franco, director of the Conference Board Consumer Research Center, said rising gas prices have much more of an impact on confidence as they go up than when they fall.
Meanwhile, shoppers are getting paltry wage increases at the same time that they are paying more for food and clothes.
The government reported on Monday that incomes rose 0.3 percent for the second straight month. But adjusted for inflation, after-tax incomes increased only 0.1 percent in May, after falling by the same amount in the previous month.