Consumer confidence plummeted in July. The indicator fell from -19 in June to -31 in July. This is the second largest drop ever recorded, after September 2007. Pessimism prevailed over the past year. Never before did consumers lose so much confidence in the space of just one year.
Consumer confidence, seasonally adjusted
Confidence in economic future reaches all time low
The component indicator reflecting consumer confidence dropped dramatically from -38 in June to -56 points in July. Consumers’ opinions on the economic situation in the past and coming twelve months deteriorated considerably. Consumers were notably more negative about the future economic situation. In June, pessimists still outnumbered optimists by 39 percent, while in July doom-mongers had a 59 percent majority over optimists. Consumers have never been as pessimistic as they were in July.
Economic climate, seasonally adjusted
Consumers’ willingness to buy also declinesThe willingness to buy, the second component, also deteriorated. Just as in September 2007, the fall was less sharp than that of the economic climate, but still was very sharp. A drop of 8 points only occurred once before. The decline in July was mainly caused by the fact consumers felt this was a much worse time to buy expensive items. The opinions consumers had about their own financial situation in the past twelve months also deteriorated. Their view on their finances in the twelve months to come worsened less.
Willingness to buy, seasonally adjusted