Consumer Confidence Slips Amid Concerns About Future Income, Business Conditions
Consumer confidence slipped slightly in June but didn’t stray far from where it’s been for two years.
The Conference Board Consumer Confidence Index dipped to 100.4 in June, down from 101.3 in May, according to a Tuesday (June 25) press release.
“Confidence pulled back in June but remained within the same narrow range that’s held throughout the past two years, as strength in current labor market views continued to outweigh concerns about the future,” Dana M. Peterson, chief economist at The Conference Board, said in the release.
The decline in confidence in June was driven by consumers between the ages of 35 and 54, according to the release. Consumers under 35 and those over 54 expressed greater confidence. There was no clear pattern among income groups.
On a six-month moving average basis, the youngest consumers (those under 35) and the wealthiest consumers (those making over $100,000) continued to have the highest confidence, the release said.
Consumers’ assessment of current business and labor market conditions improved in June, with the Present Situation Index rising to 141.5, up from 140.8 in May, per the release.
“Consumers expressed mixed feelings this month: their view of the present situation improved slightly overall, driven by an uptick in sentiment about the current labor market, but their assessment of current business conditions cooled,” Peterson said in the release.
At the same time, their short-term outlook for income, business and labor market conditions worsened, with the Expectations Index falling to 73.0 in June, down from 74.9 in May, according to the release.
That metric has been below 80 for five consecutive months, the release said, adding that 80 is a threshold that usually signals that there’s a recession ahead.
“Meanwhile, for the second month in a row, consumers were a bit less pessimistic about future labor conditions,” Peterson said in the release. “However, their expectations for both future income and business conditions weakened, weighing down the overall Expectations Index.”
Another recent report found that consumers are more confident about the prospects for their household’s financial situation than they’ve been in three years.
The Federal Reserve Bank of New York’s Center for Microeconomic Data said June 10 that 78.1% of consumers expect their financial situation to be the same or better off 12 months from now. That figure is the highest it’s been since June 2021.
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