Consumers Brighten in June; Impact on Spending in Doubt
Consumer confidence inched up in June, but the increased optimism does not appear strong enough to spur spending.
Fewer people said they plan to buy automobiles and major appliances in the next six months, while the portion planning to buy a home remains unchanged.
In its latest monthly report, the Conference Board said its consumer confidence index rose to 78 in June. It also adjusted the May figure upward, to 76.4. The New York-based business group uses 1985 as a base for its index, with consumer attitudes that year equal to 100.
The index has been relatively flat following a postwar surge, dampening hopes for a consumer-led economic rebound anytime soon.
"We just haven't seen anything in the last 30 days to get us excited about the next 60 days," said Hugh Harris, vice chairman of BancBoston Mortgage Corp., a Jacksonville, Fla., unit of Bank of Boston Corp.
June's increase in confidence was based entirely on expectations. For the 10th month since last July, people judged prevailing economic conditions as worse than in the previous month.
The portion of respondents who said they plan to buy cars between now and the end of December fell to 6.2% in June from 6.9% in May. The portion who plan to buy a home held steady at 2.8%.
Low Comfort Level
"You just don't feel that everybody is feeling real comfortable with what's happening," said Mr. Harris.
Amplifying unemployment reports, people are growing more uneasy about the job outlook. In the June survey of 5,000 households, 91.4% of those questioned said jobs are "hard to get" or "not so plentiful." That's up from 90.2% of those surveyed in May.
In one bright note, people seem more confident that business conditions will soon improve. The Conference Board said 28.3% expect business conditions to improve in the coming six months, compared with 24.4% last month. [Graph Omitted]