WASHINGTON (AP) – US consumer confidence fell to a reading of 92.6 in July as coronavirus infections spread in many parts of the country.
The Conference Board, a New York research organization, reported Tuesday that its consumer confidence index fell from a June reading of 98.3. The weakness stemmed from a drop in the expectations index, which measures consumer views on the short-term outlook for income, business and labor market conditions.
The consumer confidence index is closely followed by signals it may send about future consumer spending, which accounts for 70% of economic activity.
The Conference Board said the large decline in the expectations index reflected large declines in sentiment in Michigan, Forida, Texas and California, all states that have seen a resurgence in coronavirus cases.
According to Johns Hopkins University, about 4.2 million confirmed cases of COVID-19 have been reported in the United States, and there have been more than 146,000 deaths.
“Consumers have become less optimistic about the short-term outlook for the economy and the job market and remain subdued about their financial outlook,” said Lynn Franco, senior director of economic indicators at the Conference Board.
“Such uncertainty about the short-term future does not bode well for the recovery, nor for consumer spending,” he said.
Robert Frick, an economist at the Navy Federal Credit Union, said the big drop in consumer expectations could reflect the fact that many Americans see a fiscal cliff looming.
“More consumers see declines in business conditions and more see fewer jobs ahead,” he said. “The labor market is slowing down and may be stagnant due to increased COVID-19 infections and bankruptcies.”
The overall index hit a peak this year of 132.6 in February before the pandemic forced closings across the country in March and April.
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