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.
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