Consumer Confidence Declined in July Following June's Gain

The Conference Board Consumer Confidence Index decreased in July, a decline from June but an improvement over recent months. The composite index now stands at 92.6, down from 98.3 in June, and down from 135.8 percent one year prior. “Consumer Confidence declined in July following a large gain in June,” said Lynn Franco, Senior Director of Economic Indicators at The Conference Board. “The Present Situation Index improved, but the Expectations Index retreated. Large declines were experienced in Michigan, Florida, Texas and California, no doubt a result of the resurgence of COVID-19. Looking ahead, consumers have grown less optimistic about the short-term outlook for the economy and labor market and remain subdued about their financial prospects. Such uncertainty about the short-term future does not bode well for the recovery, nor for consumer spending.”

Steel Market Update takes data from The Conference Board and presents it as a three-month moving average to smooth the trend. It’s been four months since the coronavirus shut down the U.S. economy, and the trend is clear. The composite index is made up of two sub-indexes: the consumer’s view of the present situation and his or her expectations for the future. On a 3MMA basis comparing July 2020 with the same period in 2019, the present situation was down by 85.5 points and expectations were down by 6.6 points (Table 1). The color codes show improvement or deterioration of the individual components in Table 1; the red indicates that consumer confidence is negative in all aspects.