Consumer Confidence Falls Off in August

×
Consumer confidence falls off in AugustBy ANNE D'INNOCENZIO, AP Retail Writer

NEW YORK (AP) - Americans are feeling worse about the economy than they have in a long time.

Despite an improving U.S. job and housing markets, consumer confidence fell to the lowest level it's been since November 2011. The results are the latest swing in the index, which has been on a rollercoaster.

This year, the index declined in January, rose in February and then posted four months of declines before registering an increase in July. August's reading indicates that the gains in the job and housing markets aren't big enough to put to rest Americans' economic fears, which could have an impact on how they vote in November's presidential election.

Home prices rose in June from the same month last year, the first year-over-year increase since the summer of 2010, according to The Standard & Poor's/Case-Shiller home price index that was released Tuesday. Additionally, all 20 cities tracked by the index rose in June from May, the second consecutive time in which every city posted month-over-month gains.

The job market also is slowly on the mend. Employers added 163,000 jobs in July, the most since February. Job gains averaged 73,000 jobs a month from April through June. But that's not enough to keep up with a rising population, and the unemployment rate increased to 8.3 percent from 8.2 percent in June.

Most economists say stronger growth is needed to produce enough jobs to lower unemployment - and make Americans feel better. The economy grew at an annual rate of 1.5 percent from April through June, down from 2 percent in the first quarter and 4.1 percent in the fourth quarter of 2011.

"Consumers were more apprehensive about business and employment prospects," said Lynn Franco, director of Economic Indicators at The Conference Board in a statement.

The Consumer Confidence index, which is based on a survey conducted Aug. 1 to Aug. 16 with about 500 randomly selected people nationwide, underscored that anxiety.

The New York-based Conference Board said Tuesday that its Consumer Confidence Index fell to 60.6, down from a revised 65.4 in July. Economists had expected a reading of 66. The index now stands at the lowest point since November 2011 when the reading was at 55.2.

The index is widely watched because consumer spending accounts for 70 percent of U.S. economic activity. It has remained well below the 90 reading that indicates a healthy economy - a level it hasn't touched since the recession began in December 2007.

In the latest reading, the percentage of consumers expecting business conditions to improve over the next six months declined to 16.5 percent from 19. Those expecting more jobs in the months ahead declined to 15.4 percent from 17.6 percent, while those expecting fewer jobs rose to 23.4 percent from 20.6 percent.

In addition to worries about jobs and business conditions, Americans' outlook may also be influenced by gas prices. They fell sharply from a peak of $3.94 in early April, but have started to surge again in recent weeks. In fact, gas prices at the pump rose 19 cents to $3.71 during the period that captures the survey. That could put more financial pressure on low and middle income shoppers.

Despite their economic worries, Americans appear to be optimistic about their future earnings potential. According to the index, the proportion of consumers expecting an increase in their incomes improved to 15.7 percent from 14.2 percent.

___

AP Economics Writer Marty Crutsinger in Washington contributed to this report.

Increase your money and finance knowledge from home

Portfolio Basics

What are stocks? Learn how to start investing.

View Course »

Economics 101

Intro to economics. But fun.

View Course »

Add a Comment

*0 / 3000 Character Maximum

5 Comments

Filter by:
moca2468

Hi Teapartyiscrazy writer,

You seem to be well connected with recent political events, and the push (which I support)to eliminate unnecessary subsidies to big oil (unfortunately it failed to gain the necessary votes). We all know that the only thing that the Democrats and Republican will agree upon is to disagree with each other. Because of both parties obduration on so many issues, and the status quo of stonewalling the other parties ideas, are you in a position of power, or influence, to get this country rolling again? If so, send me an email and I will layout an almost bullet proof plan that is fair to the middle and working class, while cutting the National debt at an accelerated pace and without a massive loss in jobs or total revamping of the income tax brackets.

To give you a taste of my inspiration, my ideas can solve the 1.6 trillion dollar mission within 2 years, or less, that the SUPER COMMITTEE could not. The numbers are mostly verafiable, and available to the public to test by themselves, while the balance requires just a little bit of imagination. If you are up to the challenge, send me an email to moca2468@aol.com

August 29 2012 at 8:56 PM Report abuse -1 rate up rate down Reply
maa2626

my goodness was this unexpected? I HOPE my gas prices do not CHANGE too much!

August 28 2012 at 5:58 PM Report abuse +2 rate up rate down Reply
Somey

Bush maybe gone, but the economical debacle that Bush and a GOP house and senate left behind is still with us and will be with us for many more years to come.

August 28 2012 at 4:14 PM Report abuse +4 rate up rate down Reply
democracks0

No kidding

Obamas a fiasco

August 28 2012 at 1:59 PM Report abuse -3 rate up rate down Reply
captmerit

people are really nervous, look at the price of home heating oil!

August 28 2012 at 1:46 PM Report abuse +1 rate up rate down Reply