Retail outlook suffers as less optimistic consumers see increased financial woes
Yonkers, NY – The Consumer Reports Index’s employment measure dropped back into negative territory this month largely due to a continued decline in the percentage of new job starts in the past 30 days.
The Index’s employment measure, which compares the percentages of Americans that reported starting a new job with those that reported losing a job in the past 30-days, slipped to 49.7 from 50.5 last month. When the measure drops below 50 it is an indication that more Americans are losing jobs than they are starting.While job loss numbers increased only slightly (from 4.4 to 4.6 percent), job starts registered a sharp decline. For the second straight month, the number of Americans that started a new job (4.0 percent) dropped and has fallen to its lowest level in the past nine months.
The Consumer Reports Index’s June results also show that retail spending is struggling. The Index’s past 30-day retail measure has extended its fall to a fifth straight month. The measure now stands at its lowest level since Consumer Reports first measured it in April 2009 — falling to 8.9 from 10.6 percent last month, and from 12.0 percent last year at this time. Planned consumer purchasing over the next 30 days (7.0 percent), reflecting June activity, was also down from the prior month (8.3 percent) as well as a year ago (9.0 percent).
“When more than half of Americans are facing a substantial uphill climb, it would be hard to see a boost to confidence in the near future without substantial improvements in employment levels,” said Ed Farrell, director of Consumer Insight at the Consumer Reports National Research Center.
The Consumer Reports Index’s Trouble Tracker increased this month to 46.5 from 44.8 in May, indicating a rise in the financial difficulties consumers are facing. While the increase in financial troubles appears minor overall, the experience of those in households earning less than $50,000 points to a severely worsening situation. The Trouble Tracker for that group rose to 70.4 from 57.7 a month earlier. The disparity among economic classes deepened. Financial woes among lower-income households (70.4) are nearly three times as high as households earning $100,000 or more (23.6).
Overall consumer sentiment dropped this month to 47.5 from 50.6 a month earlier. The decline in sentiment was greatest among those in households earning $100,000 or more. While sentiment among these more-affluent households is still in positive territory at 56.6, it is down from 63.0 the prior month. Among lower-income households, those earning less than $50,000, sentiment (45.4) remains mired in negative territory (below 50) and is off slightly from 46.7 in May.
The Consumer Reports Index report, available at www.ConsumerReports.org, comprises five key measures: the Sentiment Index, the Trouble Tracker Index, the Stress Index, the Retail Index and the Employment Index.
The Consumer Reports Index, conducted by the Consumer Reports National Research Center, is a monthly telephone and cell phone poll of a nationally representative probability sample of American adults. A total of 1,023 interviews were completed (773 telephone and 250 cell phone) among adults aged 18+. Interviewing took place between May 31st and June 3rd.
The margin of error is +/- 3.2 percentage points at a 95% confidence level. The complete index report, methodology and tabular information are available.