That Was Bad

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by: Bespoke Investment Group
Summary

Consumer Confidence for the month of June missed expectations by a mile as the headline reading dropped from 131.3 down to 121.5.

This month's reading was also the lowest since September 2017 and only the fourth period since the Financial Crisis that the index dropped to a 52-week low.

While there may not have been much of a decline in the percentage of consumers viewing jobs as being plentiful, young consumers have seen a sharp drop in confidence levels.

Consumer Confidence for the month of June missed expectations by a mile on Tuesday morning as the headline reading dropped from 131.3 down to 121.5. That 9.8-point decline is tied with last December for the largest m/m decline since August 2011. Not only was the decline notable, but the magnitude of the miss relative to expectations (121.5 vs. 131.0) was the largest since June 2010. While headlines surrounding trade and Iran can understandably hurt sentiment, the fact that the stock market was bouncing off the June 3rd lows during this period and had no positive impact was notable. This month's reading in the headline index of the Consumer Confidence report was also the lowest since September 2017 and only the fourth period since the Financial Crisis that the index dropped to a 52-week low.

In terms of the breakout between Present Situation and Expectations, both indices saw similar declines in June.

With both indices seeing similar declines, the spread between the two was little changed and remains extremely elevated and at levels that have typically been seen leading up to recessions.

While the spread between Present Conditions and Expectations is worrisome, the percentage of consumers responding that jobs are plentiful didn't see as large of a decline, falling from 45.3 down to a three-month low of 44.0.

Finally, while there may not have been much of a decline in the percentage of consumers viewing jobs as being plentiful, young consumers have seen a sharp drop in confidence levels. While we saw across the board declines in confidence by age group, consumers under the age of 35 have seen the sharpest declines, falling to the lowest levels since May 2016.

Editor's Note: The summary bullets for this article were chosen by Seeking Alpha editors.