Business Scandals and Job Outlook Jolt Consumer Confidence

27 June 2002

US consumer confidence is at a four-month low, dragged down by poor employment prospects and corporate scandals, according to a closely watched barometer from New York-based research group the Conference Board.

The Board’s consumer confidence index dropped from a revised 110.3 in May to 106.4 this month, the lowest reading since February and the biggest monthly fall since the 11.7-point tumble last October. It was, however, marginally better than the 106.0 predicted by analysts.

“Weak labor market conditions, generally soft business conditions and waning public confidence in questionable business practices have helped erode consumer confidence,” explained the Board’s Lynn Franco.

The proportion of respondents saying there were plenty of jobs available decreased from 21.2% in May to 20.1%, while those thinking they were hard to find rose from 21.8% to 23.1%.

In a separate report, the National Association of Realtors revealed that sales of existing homes slipped slightly in May, dropping 0.3%. Nevertheless, the monthly tally was still the fourth-highest ever, leaving 2002 on course to be a record year.

Data sourced from: New York Times; additional content by WARC staff