Consumer Expectations at All-Time Low

The Conference Board's Consumer Confidence Index dropped from 58.1 in May to 50.4 in June (1985 = 100). The Expectations sub-index also dropped, from 47.3 to 41.0, an all-time low since 1967, the inception of the Consumer Confidence Index. The percentage of consumers expecting business conditions to worsen over the next six months outnumbered those expecting them to improve by nearly 4-to-1; 33.9% and 8.8% respectively. Consumer spending accounts for 70% of the U.S. economy, so low consumer confidence heightens the risk that the U.S. economy will enter a recession in late 2008 or early 2009.