Consumer confidence faltering, survey says
7/25/2009NEW YORK - U.S. consumer confidence waned in late July to its lowest ebb since April on growing pessimism about the long-term economic outlook, especially about income and jobs, a survey showed yesterday.
The Reuters/University of Michigan Surveys of Consumers said the July consumer sentiment reading fell to 66.0 from June's 70.8, though it was higher than economists' median expectation for a reading of 65.0, according to the Reuters poll. The index of consumer expectations fell to 63.2 in July from June's 69.2.
"Consumers believe the economic free fall is now over, but consumers see little reason to believe the stimulus policies will improve their financial condition anytime soon," a spokesman for the surveys said.
On the long-term outlook, 58 percent of respondents said they anticipated bad times, up from 49 percent in May.
Lower income and less favorable job prospects in the next year are key factors making consumers anxious about their financial position, the survey spokesman said.
"People are a little more worried about the economy, especially over the labor market and what's happening in Washington. It's still consistent with the picture that the economy is bottoming out, but you are not going to get a big bounce in consumer spending," said David Wyss, chief economist with Standard & Poor's Ratings Services in New York.
The current conditions index slipped to 70.5 in the final July reading, from 73.2 in June.
"We are going to see the stock market improve, but it has gotten ahead of itself given my expectations of a soft economic recovery. We are going to need a midrally correction. This [recent rebound] is the biggest rally we've had since the 1930s, and it makes me nervous," Mr. Wyss said.