The Conference Board's Consumer Confidence Index (CCI) fell 4.1% in June from its record-high set the month before.
The Conference Board's Consumer Confidence Index (CCI) fell 4.1% in June from its record-high set the month before. The CCI declined in four of the first six months of this year. The May-to-June drop in consumer confidence brought the index to a level a negligible 0.1% lower than at the middle of last year.
Consumer''s assessment of current economic conditions fell by 1.9% over the latest month, but was still 3.3% higher during June 2000 than in June of last year. However, expectations for the future (defined as 6 months out in this survey) plunged 6.3% between this May and June, and brought this component of the index 3.2% below where it stood during June 1999.
The CCI's for seven of the nation's nine regions recorded decreases between May and June. Consumers in the Rocky Mountain and West South Central were the most upbeat this June, recording increases in confidence of 1.2% and 2.6%, respectively, from their May CCI. Between June 1999 and June of this year, the CCI in three regions-Rocky Mountain (+12.2%), West South Central (+4.8%), and New England (+3.3%)-increased. CCIs for the remaining six regions of the country were lower this June than at mid-year 1999, with the sharpest decline both over the year and over the latest month occurring in the West North Central region. In absolute current-level terms, the CCI for the Middle Atlantic states was the lowest in the country and almost 13% below the national average CCI during June.
Special questions associated with the June confidence survey revealed that among the 5,000 households surveyed by the Conference Board, only 3.2% indicated that they had plans to buy either a new or existing home within the next six months. This was down from the revised 3.8% with home-buying intentions in May, and well below the 4.1% average for the first quarter of this year or the 4.5% average recorded during the third quarter of 1999. Higher mortgage interest rates have clearly started to have an effect on consumer psychology, although recent home sales numbers suggest that the impact on actual housing market activity has thus far been fairly modest.
The survey revealed a much sharper drop-off in auto purchase plans. The share of households that indicated they planned to buy either a new or used car between now and the end of the year plunged from 10.1% in May to 7.3% in June. Vacation plans also eased over the month, especially travel plans where an automobile was the indicated means of travel-undoubtedly in response to the sharply high price of gasoline in recent months. Holding up reasonably well so far, though, are plans for major appliance purchases. A total of 32.4% of households surveyed by the Conference Board in June said that they planned to buy one or more major appliances (TV, washing machine, refrigerator, air conditioner, etc.) at some time during the upcoming six months. This was four percentage points higher than during June 1999, and about on par with the average for the final four months of last year-a time of frenzied consumer spending.
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