Consumer confidence plunged in June to a seven-month low on continuing worries over high unemployment and stagnating wages, according to a report released Tuesday by the Conference Board, a private research group. Its Consumer Confidence Index slipped to 58.5 in June. That’s down from a revised 61.7 in May. June’s results marked the lowest point since December 2010 when the index hit 57.8.
A reading of 90 indicates a healthy economy on the index, which measures how Americans feel about business conditions and the job market now and over the next six months. Economists carefully monitor consumer confidence because consumer spending accounts for 70 percent of economic activity.
The group’s report showed that consumer confidence remains fragile two years after the recession officially ended. The index has lost momentum since it hovered between the high 50s and low 60s last year, and then climbed to a three-year high in February, reaching 72.
Economists had expected the June figure to edge up to 61 as consumers faced lower prices at the pump and inflationary fears were reduced. But weak economic indicators are said to be causing new concerns.
Said Lynn Franco, director of The Conference Board Consumer Research Center, “Consumers rated both current business and labor market conditions less favorably than in May, and fewer consumers than last month foresee conditions improving over the next six months. Inflation fears eased considerably in June, but concerns about income prospects increased. Given the combination of uneasiness about the economic outlook and future earnings, consumers are likely to continue weighing their spending decisions quite carefully.
