The Conference Board's Consumer Confidence Index fell sharply during July. After a four-point loss from May to June, the composite CCI plunged 9.2 points during July. With the drop, consumer confidence has fallen to its second-weakest monthly level of the year.
With a July 2002 reading of 97.1 on the Conference Board's scale, where average confidence during 1985 is equal to an index level of 100, the most recent composite CCI was 16.5% lower than during July 2001.
The "Present Situation" sub-index of the CCI fell 5.7 points from June to July and was 34.4% below the July 2001 index level. The "Expectations" (defined as six months into the future) component of the CCI was 11.5 points lower this July than in June. But compared with July 2001, the "Expectations" component has shown slight improvement - evidence that American consumers remain confident that better days are ahead but also that the momentum of the economic recovery will build slowly.
Still, only 9.2% of consumers surveyed during July said they expect business conditions to deteriorate during the next six months. About 21% believe conditions will be markedly improved by the first month of 2003, while about 70% of those surveyed expect that - on balance - business conditions will neither improve nor deteriorate to any appreciable degree during the balance of 2002.