Consumers cast wary eye on slow economy
By Don Hogsett -- Home Textiles Today, 8/6/2001 12:00:00 AM
NEW YORK —
Reflecting a persistently sluggish economy — and setting the stage for more of the same — consumer confidence declined modestly during July, The Conference Board reported, as Americans grew more wary about a deteriorating jobs outlook.
After edging ahead in June, the bellwether gauge slipped back to a reading of 116.5 (1985=100), down 2.0 percent from 118.9.
"The moderate decline in confidence signals slow economic growth ahead," said Lynn Franco, director of the Board's Consumer Research Center. The July reading, she said, "suggests that consumer spending will hold at, or near, current levels. Despite sluggish economic conditions and almost non-stop layoff announcements, consumers are cautiously optimistic that the economy will rebound later this year."
Consumers' assessment of current conditions was less upbeat than in June, as those rating current business conditions as "bad" rose to 14.4 percent from 12.6 percent. Those calling conditions "good" dipped slightly, to 28.3 percent from 28.9 percent.
Looking at the jobs picture, 13.9 percent said jobs are "hard to get," unchanged from June, while the number who found jobs plentiful fell to 35.8 percent from 38.3 percent. And fewer consumers expect more jobs to become available in the next six months — down to 14.9 percent from 15.6 percent.
Turning to pocketbook issues, consumers pulled in their horns somewhat, the business think tank reported — 21.8 percent expect their income to go up, down from 24.4 percent in June.
Despite some wariness about the jobs outlook, and diminished income expectations, consumers remained in a free-spending mood, with buying plans up across the board. Home-buying plans were remarkably solid, with 9.4 percent of consumers saying they plan to buy a home within the next six months, up from 6.7 percent in June.
And they still plan to buy major appliances to go along with the new homes or spruce up older homes. Plans to buy major appliances — ranging from vacuum cleaners to washing machines — rose to 30.8 percent from 27.7 percent in June.
There's still mileage to the car market as well, with 3.8 percent of consumers saying they plan to buy a car in the next six months, up from 3.4 percent the prior month.
Vacation plans declined to 44.2 percent from 46.2 percent in June.
Consumer confidence by region
|East North Central||-5.5|
|West North Central||+2.9|
|East South Central||5.9|
|West South Central||+5.0|
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