Consumer Confidence Reflects Brighter Future

August 27, 2009

This article is included in these additional categories:

Analytics, Automated & MarTech | Financial Services | Retail & E-Commerce | Trade Shows & Events

Following two straight months of decline, the Conference Board Consumer Confidence Index regained lost ground in August 2009, driven by an optimistic consumer future outlook. The index, which dropped from 54.8 in May to at 49.3 in June, increased from an adjusted score of 47.4 in July to 54.1 in August.

The index is based on the Conference Board’s monthly consumer confidence survey and comprises the Present Situation Index, which decreased from adjusted score of 23.3 in July to 24.9 in August, and the Expectations Index, which increased from an adjusted score of 63.4 in July to 73.5 in August. This marks the Expectations Index’s highest score since it reached 75.8 in December 2007.


Brief highlights from each index follow, as reported by Retailer Daily.

Present Situation Index

The percentage of consumers rating current business conditions as “bad” decreased from 46.5% to 45.6%. However, the percentage rating current business conditions as “good” also decreased, from 8.9% to 8.6%. The percentage of consumers saying jobs are “hard to get” decreased from 48.5% to 45.1%, and the percentage saying jobs are “plentiful” increased from 3.7% to 4.2%.

Expectations Index

The percentage of consumers anticipating an improvement in business conditions during the next six months increased from 18.4% to 22.4%, while the percentage expecting conditions to worsen decreased from 19% to 15.8%.

Consumers also took a more favorable outlook on short-term employment prospects, with the percentage expecting more jobs in the next six months rising from 15.5% to 18.4%, and the percentage expecting fewer jobs falling from 19% to 15.8%. The proportion of consumers expecting an increase in their incomes increased slightly from 10.1% to 10.6%.

Lynn Franco, director of the Conference Board Consumer Research Center, said the most recent consumer confidence figures demonstrate confidence is on the mend, but spending is unlikely to increase anytime soon. “Consumers were more upbeat in their short-term outlook for both the economy and the job market in August, but only slightly more upbeat in their income expectations,” said Franco. “As long as earnings continue to weigh heavily on consumers’ minds, spending is likely to remain constrained.”

Recent consumer and financial news has been mixed, offering no clear indicator of why consumer expectations improved so dramatically between July and August.

?About the index: The Consumer Confidence Survey is based on a representative sample of 5,000 US households. The monthly survey is conducted for The Conference Board by TNS. The cutoff date for August’s preliminary results was August 18, 2009.

45th Parallel Design Ad

Explore More Charts.

Pin It on Pinterest

Share This