By Bob Blandeburgo
After taking three steps forward, the Conference Board's Consumer Confidence Index took one step back in June, sending the three major stock indices downward yesterday (Tuesday).
Following three consecutive increases to a high of 54.8 in May, the Index regressed to a 49.3 in June, signaling that consumers don't view the recent flurry of positive economic indicators as a step toward recovery. Economists polled by MarketWatch.com were expecting the Index to grow to 55.5.
The news, if nothing else, speaks to the ambiguity of the current state of the economy only days after a Reuters/University of Michigan survey showed that its consumer sentiment index rose to 70.8 in June, up from 68.7 in May.
The Conference Board's Present Situation Index dropped from 29.7 in May to 24.8, while the expectations index declined to 65.5 from 71.5 the month before. The Confidence Survey is based on a sample of 5,000 U.S. households.
"The decline in the Present Situation Index, caused by a less favorable assessment of business conditions and employment, continues to imply that economic conditions, while not as weak as earlier this year, are nonetheless weak," said Lynn Franco, director of the Conference Board Consumer Research Center. "Looking ahead, expectations continue to suggest less negative conditions in the months ahead, as opposed to strong growth."
Also driving the markets down was a report from the Labor Department that said unemployment rates were higher in May than a year earlier in all 372 metropolitan areas. Fifteen areas reported jobless rates of 15%, while 21 areas were below 5%. El Centro, Calif. recorded the highest unemployment rate in the country with a Depression-like 26.8%, while Bismarck, N.D. registered the lowest rate at 3.5%.
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