Consumer Confidence Weakens More Than Expected/ Richmond Fed Strengthens

Consumer confidence in June fell to the lowest level since last August, as the index fell over 4 points to 103.9. The present conditions index fell by an even more substantial 8 points (to the weakest level in 7 months), while expectations for the next six months only declined by a little over 2 points. The decline in confidence was largest for those over 55 years of age. By income, those earning less than $50k were more worried. By region, the West saw the largest deterioration in consumer confidence. This is a worry as California alone accounts for about 15% of US GDP.

More Americans perceive business conditions as deteriorating. Jobs plentiful fell while jobs hard to get rose. A rising percentage of people expect their incomes to fall over the next 6 months than anticipate increases. Interest in buying a home in the next six months held steady at 2.8%. Most consumer goods categories saw slight declines in anticipated purchases, but demand for TVs is expected to rise.

Confidence remains at levels that historically have supported 2.5-3% growth in consumption.

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The Richmond Fed survey jumped back into positive territory in June to +4 (consensus -7), following the recent strength in other manufacturing surveys.