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Confidence Falls to 10-Month Low

Americans are starting to sense that current business conditions are weakening, and that it's getting tougher to find a job — driving their confidence level down to its lowest level in 10 months, The Conference Board reported.

The bellwether Consumer Confidence Index, widely viewed as a strong guide to future consumer spending and retail sales, fell by 4.2% in June to a reading of 103.9, giving up the gain it made the month before when it rebounded from earlier weakness to a level of 108.5.

The June reading was the weakest since August 2006, when it stood at 100.2.

"A perceived softening in present-day business and employment conditions are the major reasons behind this month's pullback in confidence," said Lynn Franco, director of The Conference Board's Consumer Research Center. "In fact, the Present Situation Index now stands at levels not seen since the final quarter of last year."

As consumers polish their crystal ball and gaze six months out, the outlook isn't much brighter, said Franco. "Looking ahead, consumers remain rather subdued about short-term economic prospects. All in all, the glass remains half empty and half full."

Weighing in on current conditions, the number of consumers who said conditions are good fell to 27.4% from 29.0% in May. There was a corresponding increase in the number who said conditions are bad, 16.4% vs. 14.6% a month ago.

Consumers also turned more negative about the job market, with the number who said jobs are hard to get rising to 21.1% from 19.7% in May. The number who said jobs are plentiful fell to 27.0% from 29.1%.

The June decline was broadly based, and confidence levels fell in six of the nation's nine geographic regions. The deepest cut was in Pacific states, down 9.3%, followed by the Middle Atlantic region, off 7.8%. The biggest gainer was New England, where confidence levels jumped up by 16.1%. Elsewhere, gains were more moderate, up 7.1% in the West North Central states and up 2.3% in the East North Central region.

CONFIDENCE BY REGION

Region % Change
Source: The Conference Board
New England 16.1%
Middle Atlantic -7.8
East North Central 2.3
West North Central 7.1
South Atlantic -5.2
East South Central -5.0
West South Central -6.1
Mountain -7.0
Pacific -9.3


BUYING PLANS IN JUNE
Plans to purchase over the next six months

Source: The Conference Board
Homes
Carpets
Cars 1.7
Major appliances -0.8
Vacations -1.2


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