Consumer confidence showing signs of strain
There’s mounting evidence that the stock market “correction,” international financial turmoil, and the personal problems of the President are beginning to weigh on the minds of Americans. High-flying consumer optimism has started its descent, and this fall will likely lead to slower gains in consumer spending during the balance of 1998.
The Conference Board’s composite Consumer Confidence Index (CCI) fell by more than 4 points in August to a level of 133.1 (1985=100). The “Present Situation” CCI was down a modest 1.4 points, but the 6-mo “Expectations” measure fell by almost 6 points during the month to its lowest reading since last October.
Among the nine regions of the country, confidence levels this August were highest in the South and in the Rocky Mountain states, while the Middle Atlantic states (New York, New Jersey, and Pennsylvania) continued to record the weakest levels of consumer optimism. Overall consumer confidence this August was at its lowest point since January, but still stood 4.3% above the reading for the same month in 1997.
Consumer confidence varies by region
(% above or below the national average confidence measure during August 1998)
South Atlantic +7.1% New England -3.3%
West South Central +5.6% West North Central -5.8%
Rocky Mountain +2.2% Pacific Coast -5.9%
East North Central +0.5% East South Central -8.9%
Middle Atlantic -19.2%
Source: The Conference Board