NEW YORK — Consumers are tired of waiting for a turnaround.
Concerned about rising unemployment, they drove the monthly consumer confidence index to an unexpected sharp decline in July.
With a turnaround in the labor market still on hold, consumer confidence sank this month, declining a significant 6.9 points to 76.6 in July from 83.5 in June, its lowest level since it reached 61.4 in March and below economists’ expectations of an increase.
The Conference Board’s monthly survey of 5,000 households broke a string of three straight months of increases in the Expectations Index, which tumbled 10 points to 86.4 from 96.4. The Present Situation Index also fell, down 2.3 points to 61.9 from 64.2, its third consecutive dip.
“The rising level of unemployment and sentiment that a turnaround in labor market conditions is not around the corner have contributed to deflating consumers’ spirits this month,” Lynn Franco, director of The Conference Board’s Consumer Research Center, said in a statement.
Saying she was a little surprised with the survey’s reading, Franco said in a telephone interview that expectations are likely to remain weak until the job market becomes more favorable. “It will take a sustained turnaround in labor market conditions in order for a sustained turnaround in confidence as well,” she said.
Unemployment rose to 6.4 percent in June, up from 6.1 percent in May, its highest level since the 6.4 percent in April 1994.
John Lonski, an economist with Moody’s Investors Service, said he was “confused” about the unexpected decline, noting he anticipated an increase of about 2 percent to 85. “This was a shocking drop,” he said.
Lonski said he believed the dip was an aberration, noting it was at odds with other indications of consumer sentiment this month, such as improving sales trends at many chain stores.
Still, he found it sobering: “It reminds us of how the lack of job opportunities threatens consumer spending prospects,” he said, adding that the decline alerts retailers that confidence and the propensity to spend are not rising in a manner that would benefit most stores.
Highlighting consumers’ worries about the labor market, their assessment of current conditions was less favorable than last month. Those rating present business conditions as “bad” rose to 30.4 percent from 28.1 percent. However, those holding the opposite view increased to 16.3 percent from 14.9 percent. Consumers claiming jobs are “hard to get” rose to 33.1 percent from 31.9 percent, while those claiming jobs are “plentiful” fell to 10.5 percent from 11.2 percent.Consumers’ expectations for the next six months were less optimistic than last month. Those anticipating an improvement fell to 20.2 percent from 23.5 percent. Consumers anticipating conditions to worsen rose to 11.5 percent from 9.2 percent.
The longer-term employment outlook was also less favorable. Consumers anticipating more jobs to become available over the next six months declined to 16.8 percent from 18.9 percent, while those expecting fewer jobs increased to 19.8 percent from 16.9 percent. The proportion of consumers anticipating an increase in their incomes declined to 15.7 percent from 17.1 percent.
EXCLUSIVE: @tomford is opening its first-ever beauty store. The boutique, which opens November 20 in London’s Covent Gardens, was designed with the over-the-top glam Ford is known for. Read the full story on WWD.com, link in bio. #wwdbeauty #wwdnews (📷: Simon Wagner) #TomFordBeauty
New York-based DJ @harleyvnewton threw a party to celebrate the holiday collection of her dress and pajama line @hvn at the Ladurée Beverly Hills. It Girls @katebosworth, @rashidajones and more joined in on the fun, which included cocktails, croque monsieur sandwiches and a photo booth. #wwdfashion (📷: Owen Kolasinski/BFA.com)
For the holidays, @Burberry partnered with 20-year-old artist @blondeymccoy on a series of three outdoor murals in downtown Manhattan. The murals are McCoy’s interpretation of a Christmas eve party, the idea of charity and the spirit of family. His third mural, pictured here, is the most personal. The image depicts McCoy’s grandparents and father in London’s Trafalgar Square in the Seventies. “My work often features lots of sentimental objects.” #wwdeye
For spring 2018, designers applied bold colors and cartoonish motifs on everything from sneakers and belts to key chains. See all the top men’s accessories trends on WWD.com. #wwdtrends (📷: George Chinsee; Prop Styling by @rnasti; Market Editor: @luiscampuzano)
The @dior-sponsored @guggenheim international gala pre-party has a history of drawing cool-girl musical acts to serenade the crowd –– and last night was no exception. @haimtheband performed songs both new and old, and lured a star-studded audience with the likes of Rebecca Hall, Kate Mara, Mamoudou Athie and more. #wwdeye (📷: @lexieblacklock)
In a partnership between the @metopera and the @englishnationalopera, “Marnie” was born. The opera, with costumes sponsored by @mrporterlive, is an adaptation of the 1961 thriller by Winston Graham. Arianne Phillips, who created the costumes, is no rookie: She’s styled Madonna for her tours and created costumes for a myriad of films in the past. Read WWD’s interview with Phillips, where she talks about her inspiration for the opera’s costumes on WWD.com #wwdfashion
@barneysnyc took a different approach to their holiday windows this year. Instead of Christmas decor, Barneys tapped @thehaasbrothers to tell a story of positivity, gratitude and inclusivity via heartwarming silliness and humor. “It’s about kids and it’s about coming together and being family and loving each other,” said Simon Haas. #wwdfashion (📷: @joshuascottphoto)
Beauty influencer @kandeejohnson makes her foray into hair care with a collaboration with @ogx_beauty — making it the first time that OGX has teamed up for a product creation. The collab includes shampoos and conditioners in three scents. At 39 and a mom, Johnson is a different profile than the emerging social media stars, but is considered one of the pioneers of the digital beauty influencer world. Read WWD’s interview with her on wwd.com, including the strangest beauty product she’s ever tried #wwdbeauty