The nations high unemployment rate impacted consumer confidence again in July, the second straight month that people's faith in the economy has wavered.The Conference Board's index that measures consumer confidence dipped to 46.6, down from June's measure of 49.3. The good news is that we are well above the low we hit back in February at 25.3.
A big factor influencing confidence these days is the nation's unemployment rate, which is expected to rise through 10% in the not too distant future, with 15 states already reporting 10% or greater unemployment.
The back to school season is getting ready to kick off over the next month, and lower consumer confidence is definitely going be felt by retailers unless things turn around quickly.
Even people that have not found themselves out of work are feeling the impact of the recession. For a lot of workers, the annual pay raise they have come to expect may not occur this year. A lot of employees are finding themselves in jobs where there has been news that their annual bonus checks will not be coming this year. Others may find that they have been asked to only work 4 days a week. All of these situations would not have been possible a few years ago, but now employees are just happy to have their jobs.
It is easy to understand why consumer confidence is lower. It is not a matter of how strong the stock market looks, or how many houses were sold last month, the rebound in the economy is not going to happen until people go back to work. Unemployment is the key here.
What are your thoughts on consumer confidence? What factors other than unemployment could really impact consumer confidence, and when do you think confidence will rebound?
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