Consumer confidence turns corner? Not quite
The Conference Board's Consumer Confidence Index (CCI) improved for the second consecutive month this June, posting a 1.6 percent increase following declines over most of the past year.
Consumers' assessment of ongoing economic conditions and expectations for the near-term future were mixed, so it's not yet possible to say definitively that confidence has turned the corner. The "Present Situation" subindex decreased 3 percent over the month, while "Expectations" — defined as six months into the future — rose an encouraging 7 percent between May and June.
With a June 2001 reading of 117.9 on the Conference Board's scale, where average confidence during the year 1985 is equal to an index level of 100, the composite CCI was still a steep 15.3 percent lower than during June 2000.
The CCIs for eight of the nation's nine geographic regions registered improvement between May and June. Particularly sharp increases were recorded in the East South Central (+7.6 percent) and Middle Atlantic (+6.2 percent) regions. More worrisome for the long-term was the 6 percent drop in confidence recorded in the West North Central region.
Confidence levels this June were much lower than consumers' outlook during June 2000 for all regions. Variations were small, ranging from an 11.6 percent dip in confidence among Middle Atlantic consumers to a 20 percent decline in the East South Central region.
While consumers say they are growing marginally more confident about their job, income prospects and the state of the U.S. economy, their actual buying plans reflect increasing caution about the months ahead. Plans for the purchase of homes and major appliances are down.
Consumer confidence in June 2001
(Percent of U.S. confidence)
|Source: The Conference Board
|East North Central||-3.7|
|West North Central||-7.5|
|East South Central||-9.0|
|West South Central||5.0|