Pessimism builds up on back of rising job worries

 

The June Nationwide Consumer Confidence Index points to a likelihood of growth slowing in the coming months.

 

A fall of 5 points (not seasonally adjusted) in the headline index to 64 takes the measure back to its level a year ago. In the past 2 months the measure is down 14 points. Its slump is greater than the GfK measure (itself down for a near record fourth successive month) as it reflects job sentiment to a larger extent.

 

Its Expectations sub-index covering the general economic situation, job availability and income growth slumped by 8 points to 90, its lowest level since May 2009. The balance of people expecting there to be more or some jobs available in the next 6 months fell on the month from a net balance of 17% to 30%, its lowest since last August. Fewer people (27%) compared to 30% in May and 33% a year ago expect the economy to be better in 6 months time. 15% of people expect income to rise the same proportion as expect income to fall - a big drop from a positive +9% expecting incomes to rise in February.

 

As a result spending confidence on major purchases, which has held up well in the past year is reducing. The headline Spending Index fell 3 points to 99 from 102 in May, but masks the fall in spending confidence on big-ticket items, such as a house or car. The end of stimulus measures may finally be being reflected in the survey data the net balance of 11, being the lowest since January 2009.

 

To be fully briefed on the mood of the consumer, subscribe to the monthly UK Consumer Confidence Monitor. Regional and High Earner versions are available.

 

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