June Consumer Confidence was 2.5 pts below estimates at 58.5 and down from an upwardly revised 61.7 in May. It’s a 7 month low as both the Present Situation and Expectations components fell. A main factor in the weakness was the answers to the labor market questions. Those that said jobs were Plentiful fell .5 pt and those that said jobs were Hard To Get rose .3 pt. Also of note, those expecting more jobs over the next 6 months fell to the lowest since July ’10 with most expecting the jobs outlook to remain flat. Those planning to buy a home within 6 months fell sharply to the lowest since Dec and those that want to buy a car also saw a steep drop of 3 pts to also the lowest since Dec. Coincident with the drop in gasoline prices, one year inflation expectations fell to 6% from 6.5% but still remains above the 20 yr avg of 4.70%. Bottom line, a difficult labor market continues to be the main drag on confidence, notwithstanding the recent drop in gasoline prices. But, as we know, gasoline prices are still high and a drop from $4 a gallon to $3.55 isn’t going to dramatically alter the mood especially when the jobs picture is still uncertain for many. With respect to the market response, it rarely moves off a confidence # and all eyes remain on Greece.
