Things are supposed to be falling apart: Economic growth has slowed, unemployment is stuck at 8.2 percent, yet consumer confidence is hanging in there, kind of. It is low, but it's not falling this month. The Conference Board's Consumer Confidence Index for the month of July showed a slight increase from June, up to 65.9 from 62.7.
Bankrate's Financial Security Index was released last week, which showed a dip in consumer feelings of financial security from the previous month.
Though consumers in the Conference Board's survey are not pleased with the current economic atmosphere -- the metric called the Present Situation Index slipped to 46.2 percent from 46.6 percent -- they do have high hopes for the future.
From the Conference Board:
… consumers were generally more optimistic about the short-term outlook in July. The percentage of consumers expecting business conditions to improve over the next six months rose to 18.9 percent from 16.0 percent, while those anticipating business conditions will worsen decreased to 14.6 percent from 15.8 percent. Consumers’ outlook for the labor market was also more upbeat in July. Those expecting more jobs in the months ahead increased to 17.6 percent from 14.8 percent, while those anticipating fewer jobs edged down to 20.3 percent from 20.8 percent.
No one is raving about income prospects, however; the number of people expecting an income boost is down from 15.3 percent to 14.2 percent.
The Commerce Department reported on incomes and consumer spending for the month of June today. Though incomes were up 0.5 percent, consumer spending was mostly flat, down less than 0.1 percent in June.
Without more jobs being added to the economy along with consistent wage increases, it's difficult to see how consumers can spend enough, for long enough, to get the economy into solid recovery mode. It's a vicious cycle we're in, but hey ... at least it's not last summer when everything went haywire as beach season wrapped up.
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