Just as you thought things were starting to improve, consumers went back into a funk this month. In the latest Consumer Confidence report for the month of July, confidence plummeted from 99.8 down to 90.9 even as economists were forecasting sentiment to improve to a level of 100.0. With the big decline, Consumer Confidence posted its largest monthly drop since August 2011 and the biggest miss relative to expectations since June 2010. No matter how you slice it, it wasn’t a good report. The chart below shows the historical readings of Consumer Confidence going back to 1967. With this month’s decline, Consumer Confidence is now back below its historical average of 93.4 for the first time in 2015.
Within each month’s Consumer Confidence report, respondents are asked a variety of questions related to buying intentions, vacation plans, interest rates, and stock prices. Although confidence declined this month, it was notable to see that plans to buy an appliance increased to a post-recession high of 52.2%. Regarding stocks prices, we have also seen a notable decline in bullish sentiment as the percentage of consumers expecting higher stocks prices (32.4%) declined to its lowest level since last October, while the percentage expecting lower stock prices rose to 28.6%, which is also the highest level since last October. It would appear that the frustrating back and forth action of the market that we have seen throughout 2015 is really beginning to take its toll on the market sentiment of average Americans.