Front Page || Main Index || Corpus Christi News || Business || Texas || Sports || Entertainment || Selena
Wednesday, Jul. 29, 1998
Consumer confidence falls but remains high
Many people plan to buy car, home or appliance
Associated Press
NEW YORK -- A gyrating stock market and concerns over a slowing economy spooked many Americans in July, leaving them edgy that the good economic times will end and that jobs will be harder to find.
The Conference Board reported Tuesday that its index of consumer confidence fell to 135.4 in July from a revised 138.2 reached in June, a 29-year high. July's decline was larger than Wall Street analysts had expected.
``Consumer confidence is still high and strong,'' said Sung Won Sohn, chief economist at Norwest Corp. in Minneapolis. ``But when things are so good, people have a tendency to think that it can't get much better and it may get a bit worse.''
The market has been spooked by worries that corporate profits will be hit harder by Asia's economic turmoil. On Tuesday, it also was unsettled by political uncertainties, with word that Monica Lewinsky was given blanket immunity in exchange for testimony in an investigation of her relationship with President Clinton.
Consumer confidence has been strong this year, with many Americans feeling satisfied with the nation's healthy economic pace and happy about another record-setting year on Wall Street.
But sentiments began to shift in July, when more Americans began to worry about an economic slowdown.
The stock market has been exceptionally volatile in the last month. The Dow reached a record 9,337.97 on July 17, then plunged 400.61 points the following week. Wall Street's best-known indicator continued its roller-coaster course this week, reversing sharp gains in a dramatic Monday rally, then stumbling Tuesday.
``What happened in July is we saw some market volatility, with stock prices becoming vulnerable,'' said Dan Seto, an economist at Nikko Securities International Co. ``That could have played a role in consumers' expectations softening a bit.''
Consumer sentiment is important because consumer spending accounts for two-thirds of the nation's overall economic activity.
According to the Board's index, consumers felt less confident about the current economic situation, sending the index that measures feelings about present conditions down 1.2 point to 170.1 in July.
Consumers in July were also nervous about the outlook for the next six months. The expectations index fell 3.9 points to 112.3. More consumers expected there to be fewer jobs available and thought business conditions would worsen.
Despite their pessimism about future economic conditions, more consumers said they were planning to buy a car, home or purchase a major appliance in the next six months.
Those who live in the Pacific Northwest, Southeast and Rocky Mountain regions of the country were most confident in the economy, while those living in the Middle Atlantic states were least confident.
The consumer confidence index, started in 1967, is compiled from responses to questions sent to 5,000 households nationwide. The survey polls consumers on matters ranging from job prospects to buying plans. The index compares results to its base year, 1985, when it stood at 100.Post your comments about local news eventsFront Page || Main Index || News || Business || Texas || South Texas Outdoors || Birdwatching || Sports || Entertainment || Selena || Education || South Texas Attractions || World Wide Web