Consumer sentiment remained in negative territory as a stagnant job market is keeping consumers cautious about spending, according to the Consumer Reports Index July report.
The Consumer Sentiment Index, which measures how consumers are feeling financially when compared with a year ago, rose slightly to 48.5 from the previous month, but it continues to lag in negative territory. Senior citizens and households earning less than $50,000 have the most negative outlook.
“The economy is treading water and really hasn’t shown any momentum toward recovery,” said Ed Farrell, a director at Consumer Reports National Survey Research Center. “Consumers remain cautious, especially households with income less than $50,000, who have been hurt the worst and face the biggest stresses regarding jobs, unpaid bills, and health care access and affordability.”
The Northeastern region saw the best improvements in July for the Consumer Reports Stress Index, while the Consumer Reports Trouble Tracker Index, which measures the depth and breadth of household financial difficulties, improved the most in the West. Southern states were the most optimistic, with a Consumer Reports Sentiment Index of 51.1.
The Consumer Reports Employment Index showed a job market that was decidedly stagnant, with approximately the same number of jobs being created and lost. On July 8, the U.S. Bureau of Labor Statistics reported that the overall unemployment rate is 9.2% for June.
“The job market is one of the biggest impediments to an economic recovery. Poor hiring depressed retail performance in June, and is also expected for the rest of July,” Farrell said. “Last month’s retail index was the weakest since October, and planned purchases are anemic compared with the past few months.”
Nationwide, the Consumer Reports Trouble Tracker showed consumers were facing more money problems than the prior month, but the problems are not as severe as a year ago. July’s overall Stress Index found that consumers have nearly the same degree of angst as they had the prior month.
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 1,006 interviews were completed (755 telephone and 251 cell phone) among adults aged 18+. Interviewing took place between June 23 and 26. The margin of error is +/- 3.2 percentage points at a 95% confidence level.