Consumer Confidence Falls Again in June
Nearly 70 percent said a recession was likely, and consumer fears over future business and employment conditions eroded again, even as their assessment of their current job prospects remained positive.
Inflation expectations improved, after recent data showed that price increases are slowing even as economists watch for tariff impacts.After rebounding last month, consumer confidence took a surprising dip in June, as cautious consumers worried about their future job prospects and the possibility of a recession.
The Consumer Confidence Index fell by more than five points to a reading of 93.0 in May. The Conference Board's monthly survey showed that tariff worries kept consumers on edge. Nearly 70 percent of consumers believe a recession is likely within the next year, and that's preventing them from making big spending decisions.
'They are sitting on the sidelines and only buying homes, cars and appliances if they absolutely must,' said Heather Long, chief economist at Navy Federal Credit Union. 'This is an 'abundance of caution economy.''
Economists surveyed by The Wall Street Journal and Dow Jones Newswires projected a second month of improvement in the survey, but weakening results on job prospects helped weigh the results down. This marks the sixth decline in seven months for the confidence index, which more closely reflects labor market conditions than other consumer surveys.
'Consumer confidence weakened in June, erasing almost half of May's sharp gains,' said Stephanie Guichard, a senior economist at The Conference Board. 'Consumers were more pessimistic about business conditions and job availability over the next six months, and optimism about future income prospects eroded slightly.'
Consumers remain positive about current job prospects, which Guichard said is in line with the recent economic data that shows employers are still hiring. But they offered a pessimistic outlook for tomorrow's job listings, which could indicated trouble for the labor market, which has helped propel the U.S. economy.
'This indicator correlates well with future employment trends and suggests further softness in hiring ahead,' said Nationwide Economist Daniel Vielhaber.
Consumers outlook on inflation improved, however, with expectations for price increases slowing to an annual rate of 6% in June, down one percentage point from two months ago. The data follows recent inflation reports that have shown price increases slowing down, even as economists warned of price spikes stemming from U.S. tariff policies.
'Tariffs remained on top of consumers' minds and were frequently associated with concerns about the economy and prices,' Guichard said. 'However, there were a few more mentions of easing inflation compared to last month.'
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