Consumer Confidence Hits New Low in July
Consumer confidence in the economy continued to sag in July as gas and food prices soared and the stock market endured its worst June performance since the Great Depression.
In fact, the Consumer Attitudes and Spending by Household Index by RBC Financial Group (New York)—a monthly national survey of consumer attitudes—dropped to 14.6, an all-time low. The RBC CASH index was 22.5 in June.
“Consumers are being ground down by the cumulative effects of high gasoline and food prices, a falling stock market, weakening housing values and a shaky job market. Unfortunately, these negative conditions are likely to persist well beyond when the last of the tax rebate checks is cashed in July. Consequently, consumer sentiment is unlikely to reach healthy levels anytime soon,” said T.J. Marta, economic and fixed-income strategist for RBC Capital Markets.
Less than one in five consumers (18 percent) believed their local economy would strengthen in the next six months, compared with 22 percent in June. And only one in four consumers (25 percent) expected their personal financial situation to improve over the next six months, compared with 31 percent in June.
So it’s no surprise that retail sales are slow: Retail sales for June rose only 1.3 percent unadjusted over last year, and increased 0.2 percent seasonally adjusted month-to-month, according to the National Retail Federation (Washington).
“As retailers enter the back-to-school season, they will have to be creative in finding ways to get consumers to spend on discretionary items,” said NRF chief economist Rosalind Wells. [September 2008 PET AGE]
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