RTTNews - After showing a notable improvement in May, consumer confidence unexpectedly deteriorated in June, according to a report released by the Conference Board on Tuesday. The decrease reflected less favorable assessments of both current conditions and the near-term outlook.
The Conference Board said its consumer confidence index fell to 49.3 in June from a revised 54.8 in May. The decrease surprised economists, who had expected the index to edge up to 55.3 from the 54.9 originally reported for the previous month.
Commerzbank analyst Bernd Weidensteiner said, The recent increase of gasoline prices and a more pessimistic take on the labor market obviously prevented a further improvement of consumer sentiment.
Considering the ongoing deterioration of the labor market and the related subdued outlook for wage increases, a temporary setback for consumer confidence had become increasingly likely, Weidensteiner added.
Reflecting consumers' less favorable appraisal of present-day conditions, the present situation index fell to 24.8 in June from 29.7 in May.
Lynn Franco, Director of the Conference Board Consumer Research Center, said the decline by the present situation index continues to imply that economic conditions, while not as weak as earlier this year, are nonetheless weak.
Those claiming business conditions are bad rose to 45.6 percent in June from 44.5 percent in May, while those claiming conditions are good fell to 8.0 percent from 8.8 percent.
Consumers also had a less favorable assessment of the labor market, with those saying jobs are hard to get rising to 44.8 percent in June from 43.9 in May and those saying jobs are plentiful falling to 4.5 percent from 5.8 percent.
The report also showed a deterioration in consumers' short-term outlook, as the expectations index fell to 65.5 in June from 71.5 in May.
Those expecting conditions to worsen over the next six months rose to 20.2 percent in June from 18.0 percent in May, while those anticipating an improvement in conditions fell to 21.2 percent from 22.5 percent.
Consumers were also more pessimistic about the job outlook. Those anticipating fewer jobs in the months ahead increased to 27.3 percent in June from 25.6 percent in May, while those expecting more jobs fell to 17.4 percent from 19.3 percent.
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