Stocks, Scandals Send Consumer Confidence Tumbling

ByJohn S. McClenahen At least in their words, consumers have significantly less confidence in the U.S. economy than they did a month ago. The Conference Board's Consumer Confidence Index tumbled in July to 97.1 (1985 = 100), down dramatically from its June level of 106.3. "The erosion in consumer confidence represents a significant deterioration in consumer attitudes," states Lynn Franco, director of the research center at the Conference Board, a New York-based business research group. "The continued decline in the value of stock market portfolios, coupled with ongoing reports of corporate scandals, have taken a toll on consumer confidence," she says. What's more, "the continued decline in [the Conference Board's] Present Situation Index suggests that consumers would tend to curb their spending in the absence of offsetting incentives." The Present situation index fell to 99.2 in July, down from 104.9 in June. Consumer confidence by the Conference Board's measure is now at its lowest level since February, the business group notes. "And while the current reading is not alarming by historical standards, a continued slide could very well jeopardize the economic recovery," it suggests.