Economic News Sapping Confidence

The recent spate of weak economic news and the ongoing threat of a European financial disaster are sapping the confidence of consumers and business leaders alike.  The latest reading on consumer confidence by the Conference Board declined for the fourth consecutive month in June, as consumers expressed a gloomier outlook for future business conditions and income.  Meanwhile, the Business Roundtable’s quarterly survey of CEOs from the nation’s largest companies found them less optimistic about sales, capital spending and hiring in the second quarter.  Only 36 percent of CEOs expected their companies to add more workers over the next six months, down from 51 percent at the same point last year.  The latest data from the Bureau of Labor Statistics suggest that hiring may indeed be heading for a summer slump.  The Bureau’s Job Opening and Labor Turnover survey found that employers hired 4,175,000 new workers in April, down from 4,335,000 the previous month.  What will it take to boost confidence among consumers and business leaders?  Why does falling confidence virtually ensure that that the economy will remain in a weakened state through the summer?  Are there any bright spots in the economic or employment picture?

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