NEW YORK – After jumping up in May following a five-month decline, consumer confidence has taken a turn once again. According to the latest figures from the Conference Board‘s Consumer Confidence Index, consumers are no longer feeling positive and the short-term outlook is strongly showing signs of recession.
The Consumer Confidence Index dropped 5.4 points in June to 93.0. The Present Situation Index – consumers’ assessment of current business and labor market conditions – also fell 6.4 points to 129.1. Consumers’ short-term outlook on current conditions with the Expectations Index fell another 4.6 points. The Expectations Index now sits a 69.0, which is well below the 80-mark threshold that typically signals a recession is near.
“Consumer confidence weakened in June, erasing almost half of May’s sharp gains,” said Stephanie Guichard, senior economist of global indicators at The Conference Board. “The decline was broad-based across components, with consumers’ assessments of the present situation and their expectations for the future both contributing to the deterioration. … The three components of the Expectations Index — business conditions, employment prospects and future income — all weakened.”
The retreat in confidence was shared across all age groups, almost all income groups and all political affiliations. Tariffs remained a big concern for consumers, along with inflation.
“Consumers’ write-in responses revealed little change since May in the top issues impacting their views of the economy,” Guichard said. “Tariffs remained on top of consumers’ minds and were frequently associated with concerns about their negative impacts on the economy and prices. Inflation and high prices were another important concern cited by consumers in June. However, there were a few more mentions of easing inflation compared to last month.”
Here are some other key points from this month’s report:
Present Situation
Consumers’ assessments of current business conditions were less positive in June.
- 19.0 percent of consumers said business conditions were “good,” down from 21.4 percent in May.
- 15.3 percent said business conditions were “bad,” up from 13.7 percent.
Consumers’ views of the labor market cooled somewhat in June.
- 29.2 percent of consumers said jobs were “plentiful,” down from 31.1 percent in May.
- 18.1 percent of consumers said jobs were “hard to get,” down slightly from 18.4 percent.
Expectations Six Months Hence
Consumers were more pessimistic about future business conditions in June.
- 16.7 percent of consumers expected business conditions to improve, down from 19.9 percent in May.
- 24.0 percent expected business conditions to worsen, down from 25.4 percent.
Consumers’ outlook for the labor market also became more negative in June.
- 15.4 percent of consumers expected more jobs to be available, down from 18.6 percent in May.
- 25.9 percent anticipated fewer jobs, down slightly from 26.2 percent.
Consumers’ outlook for their income prospects was, on balance, moderately less positive in June.
- 16.3 percent of consumers expected their incomes to increase, down from 18.6 percent in May.
- But only 12.4 percent expected their income to decrease, down from 13.5 percent.
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