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Instant View: Consumer confidence slumps in June
NEW YORK |
NEW YORK (Reuters) - Consumer confidence fell steeply in June after rising for three months, due to worries about the labor market because of a recent slowdown in jobs growth, according to a private sector report released on Tuesday.
KEY POINTS: * U.S. consumer confidence fell steeply in June after rising for three months, due to worries about the labor market because of a recent slowdown in jobs growth, according to a private sector report released on Tuesday. * The Conference Board, an industry group, said its index of consumer attitudes fell to 52.9 in June from a downwardly revised 62.7 in May. * The June figure was sharply below the median of forecasts from analysts polled by Reuters, which was for a reading of 62.8 with forecasts ranging from 59.5 to 65.5. The May reading was revised down from an original 63.3. * The expectations index fell to 71.2 from 84.6 in May. The present situation index fell to 25.5 from 29.8 in May. Consumers' assessment of the labor market worsened.
ANDREW BUSCH, CURRENCY STRATEGIST, BMO CAPITAL MARKETS,
"It highlights the string of very negative news flow that's been out overnight. Clearly, the drop in the consumer confidence number was significantly sharper than expected. Consumer confidence is fairly closely tied to consumer spending and obviously retail sales, so this bodes ill for the U.S. economy and perhaps the global economy to some extent as well."
JIM O'SULLIVAN, CHIEF ECONOMIST, MF GLOBAL, NEW YORK
"You are back to where you were in March. It's not a new downtrend but it's still a disappointing report. Other sentiment surveys have not showing a renewed downtrend in confidence. Much of this weakening is a reversal of the exaggerated strength in recent months.
"The current perception on the job market didn't change that much. I think it's more general perception of the turmoil in the markets.
"I do think the risk for the jobs report on Friday will be weaker than consensus.
"The stock market is already quite worried about the outlook (for the economy.) This would only add to those worries, rightly or wrongly."
SEAN SIMKO, FIXED-INCOME PORTFOLIO MANAGER, SEI, OAKS,
"The consumer confidence report is concerning. It reflects the pessimism within the labor market. I think there is still quite a bit of nervousness from Europe, which isn't fading. If you combine that with the concerns about the labor market and economic stability, you will have a bid in the Treasury market, which is what is happening.
"There remain a lot of questions around the sustainability of economic growth."
(On the 10-year Treasury note yield below 3.0 percent) "At these levels I think the Treasury market is a little bit overdone. Unless there are additional problems within the economy I wouldn't expect these levels to hold."
BART BARNETT, HEAD OF LISTED TRADING, MORGAN KEEGAN & CO,
"It wasn't good. This is a continuation from what we saw this morning, first from China, then Europe and now the U.S. Perhaps this is the end of the bad news. But it certainly isn't a surprise for us to be down 2 percent, since Europe and China were both down more than that. This sell-off is expected, and I haven't seen much panic. Hopefully we'll find a bottom here."
TOM PORCELLI, U.S. ECONOMIST, RBC CAPITAL MARKETS, NEW YORK
"It's pretty ugly. Even the underlying data are pretty ugly. Whether you're looking at the present situation, expectations or the labor market.
"It obviously flies in the face of what we saw in the Michigan report earlier in the month. There are definitely some countervailing forces here. The Conference Board measure of confidence is much more volatile than the Michigan measure. So you might have to take it with a slight grain of salt.
"This report is pretty labor-intensive. It's influenced probably to a bigger extent than Michigan is than what happens with the employment backdrop. There's a laundry list of headwinds we can point to and say--Europe played a role, the state of municipal finances, all of those fears.
"I think there's downward pressure building in the economy. If we do see a robust payroll number on Friday it could really stop the (confidence) numbers from sliding."
MARKET REACTION: STOCKS: U.S. stock indexes added to losses BONDS: U.S. Treasury debt prices extended gains slightly DOLLAR: U.S. dollar fell against the yen
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