The Conference Board Consumer Confidence Index dropped sharply in August to its lowest level since this time last year.
The index, released this morning (August 28), fell to 105.0, down from 111.9 in July. The Present Situation Index decreased to 130.3 from 138.3 in July.The Expectations Index declined to 88.2 from 94.4.
Lynn Franco, director of The Conference Board Consumer Research Center, said, "A softening in business conditions and labor market conditions has curbed consumers' confidence this month. In addition, the volatility in financial markets and continued sub-prime housing woes may have played a role in dampening consumers' spirits. But, despite less favorable conditions and in spite of all the recent turmoil, consumers still remain confident.And, current Index levels suggest further economic growth in the months ahead."
Consumers claiming conditions are "good" decreased to 26.4% from 28.3% in July while those saying conditions are "bad" jumped to 16.3% from 14.5%.Those saying jobs are "hard to get" increased to 19.7% from 18.7%, and those claiming jobs are "plentiful" fell to 27.5% from 30.0% in July.
Consumers expecting business conditions to worsen in the next six months rose to 10.6% from 8.2%; those expecting improvement was virtually unchanged at 15.0%. Those expecting more jobs in the months ahead declined to 13.0% from 13.8%; those expecting fewer jobs increased to 15.3% from 14.9%.
Still, 19.1% of those surveyed said the expected their incomes to increase in the months ahead, the same percentage as last month.