US consumer confidence sank in June as households worried about the prolonged recession and vanishing jobs, the Conference Board said today.
The business research group said its consumer confidence index retreated to 49.3 points in June from a revised 54.8 in May, an eight-month high. Most analysts had expected a much stronger reading of 55.3 points in the 100-point index.
Consumers felt more pessimistic about current conditions and conditions in the coming months, according to the monthly survey of 5,000 US households.
The present situation index tumbled to 24.8 in June from 29.7 in June and the expectations index, measuring the outlook for the next six months, dropped to 65.5 from 71.5.
'The decline in the present situation index, caused by a less favourable assessment of business conditions and employment, continues to imply that economic conditions, while not as weak as earlier this year, are nonetheless weak,' said Lynn Franco, research director of the Conference Board.
Franco said the expectations index continued to suggest less negative conditions in the months ahead, as opposed to strong growth.
The June consumer confidence index, however, remains well above the April reading of 40.8, and is far better than the all-time bottom of 25.3 hit in February, the lowest level since tracking of the data began in 1967.
In the June outlook on current economic conditions, those finding business conditions good declined to 8% from 8.8%, while those claiming they were bad increased to 45.6% from 44.5%.
Consumers claiming jobs were 'hard to get' rose to 44.8% from 43.9%. Those saying they were 'plentiful' fell to 4.5% from 5.8%.
Expectations over the next six months also deteriorated, the survey revealed. Consumers expecting business conditions will improve dropped to 21.2% from 22.5%, while those anticipating they will worsen increased to 20.2% from 18%.
Consumers also grew increasingly worried about the labour market, as many economists predict the unemployment rate will hit double-digit figures this year as the economy grapples with recession.
With job insecurity on the rise and home prices falling in the collapse of the housing market, consumers expecting an increase in their incomes in the next six months fell to 9.8% from 10.8%.
