In the face of ongoing geopolitical uncertainty and economic headwinds, consumers’ feelings about the economy remain dim.
The nonprofit research firm, The Conference Board, released its latest month report Aug. 25, with its Consumer Confidence Index falling by 0.8 points to 89.4. July’s revised estimate was 90.2, leaving behind nearly a whole point between the two months.
In another report showcasing negative consumer outlooks, the latest University of Michigan’s consumer sentiment survey revealed a nearly 8% decline for mid-August.
At the same time, though, the Conference Board’s Present Situation Index—based on consumers’ assessment of current business and labor market conditions—broke its downward spiral after three consecutive months and rose by 6.8 points to 121.2.
That doesn’t mean consumers are necessarily growing more optimistic, though, as the Expectations Index—based on consumers’ short-term outlook for income, business and labor market conditions—fell 5.8 points to 68.2. The survey period for this month’s preliminary results was Aug. 3-16, accounting for the first half of the month.
Dana M. Peterson—chief economist at The Conference Board—described the shifts between present and future consumer attitudes.
“Consumer appraisals of current business conditions were mildly positive. Perceptions of the current labor market improved, reversing three months of moderate decline,” she said. “Looking ahead, consumers were more pessimistic about business conditions and the labor market over the next six months. Expectations for household incomes moderated but remained optimistic overall.”
Bleak expectations for the future coincide with guarded sentiments from experts. The most recent meeting for the Federal Reserve’s Open Market Committee (FOMC) concluded with static interest rates, but hikes were discussed and considered.
Currently, minor shifts to mortgage rates continue to range in the upper-to-mid 6% which may occasionally offer relief to homebuyers, but the pattern remains unclear and volatile.
Mohamed El-Erian, an economics professor of practice at UPenn and former president of Queens’ College, Cambridge, called the survey results “a miss” on social media, saying the data is “raising the stakes” for the next University of Michigan survey. New home sales, which came down over 10% month-to-month, are also a cause for concern, El-Erian wrote.
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