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The Conference Board's Consumer Confidence Index fell 3.5% from May to June after rising during four of the previous six months. With a June 2002 reading of 106.4 on the Conference Board's scale, on which average confidence during 1985 is equal to an index level of 100, the most recent composite CCI was 10.5% lower than in June 2001.
The "Present Situation" subindex of the CCI declined by 4.9% during June and remained 33.4% below the June 2001 index level. The "Expectations" (defined as six months into the future) component of the CCI was 2.6% lower this June than in May. But compared to June 2001, the "Expectations" component has improved by 14.3% - a positive sign for the future direction and strength of consumer spending for the balance of 2002, although not quite as positive as in April and May.
The CCIs for six of the nation's nine geographic regions fell from May to June. The steepest losses were recorded in the Middle Atlantic (-11.6%), East North Central (-10.9%) and Pacific Coast (-8.9%) regions. At the same time, solid over-the-month improvement in consumer confidence occurred in the West North Central (+9.1%), East South Central (+8.3%) and South Atlantic (+6.2%) groups of states.
Overall confidence levels this June were lower than consumers' overall assessment of economic conditions during the middle of 2001 for all regions of the country. Confidence was much lower in June 2002 than at midyear 2001 in the Middle Atlantic (-22.5%) and East North Central (-17.1%) states, but nearly unchanged in the South Atlantic (-1.4%) and East South Central (-2.7%) regions.
In a separate part of the June consumer survey commissioned by the Conference Board, we continued to see little evidence of sustained improvement in the actual buying plans (as opposed to subjective "confidence" sentiment) of American households.
The percentage of consumers surveyed nationwide by the Conference Board indicating that they planned to buy a home (new or existing) during the next six months declined from 3.6% in May to 3.3% in June. This was the lowest level recorded since last November, and much lower than the 4% rate that prevailed over the early months of 2002.
Motor vehicle purchase plans also continued to ease. During June, 7.6% of those surveyed said they planned to buy a car (new or used) in the near future, down from the 7.9% average for April and May, and sharply lower than the 9.4% level recorded during July 2001.
In addition, consumers in June were much less enthusiastic about other potential "medium-ticket" purchases during the next six months than they had been earlier in the year. An estimated 28.9% of consumers surveyed during the month said they planned to purchase one or more major appliances during the next six months, much lower than the 31.3% level recorded in April and the 30.9% in July 2001.
