Consumer Confidence Slips In June
Consumer sentiment ticked down in June, reports The Conference Board in its Consumer Confidence Index. The decrease follows an increase recorded in May, and the Index now stands from at 121.5, down from 131.3 in May.
Looking more closely at The Conference Board’s findings, its Present Situation Index, which reflects consumers’ assessment of current business and labor market conditions, decreased from 170.7 to 162.6. The Expectations Index, which is drawn from consumers’ short-term outlook for income, business and labor market conditions, also decreased, slipping from 105 last month to 94.1 this month.
“After two consecutive months of improvement, consumer confidence declined in June to its lowest level since September 2017,” says Lynn Franco, senior director of economic indicators at The Conference Board. “The decrease in the Present Situation Index was driven by a less favorable assessment of business and labor market conditions. Consumers’ expectations regarding the short-term outlook also retreated. The escalation in trade and tariff tensions earlier this month appears to have shaken consumers’ confidence. Although the Index remains at a high level, continued uncertainty could result in further volatility in the Index and, at some point, could even begin to diminish consumers’ confidence in the expansion.”
Consumers’ outlook on current-day conditions eroded in June. Those claiming business conditions are “good” decreased from 38.4 percent to 36.7 percent. However, those saying business conditions are “bad” also decreased, from 11.7 percent to 10.9 percent. Their appraisal of the labor market was also down. Consumers saying jobs are “plentiful” decreased from 45.3 percent to 44 percent, while those claiming jobs are “hard to get” rose from 11.8 percent to 16.4 percent.
Consumers’ assessment of the short-term outlook also grew less optimistic in June. The percentage of them expecting business conditions to improve six months from now decreased from 21.4 percent to 18.1 percent, while those expecting business conditions to worsen rose from 8.8 percent to 13.1 percent.
Expectations for the labor market were also less favorable. The share of consumers expecting more jobs in the months ahead decreased from 18.4 percent to 17.3 percent, while those anticipating fewer jobs increased from 13 percent to 14.8 percent. Regarding short-term income prospects, the percentage of consumers expecting an improvement decreased from 22.2 percent to 19.1 percent, while the proportion expecting a decrease inched up from 7.8 percent to eight percent.
The monthly Consumer Confidence Survey, based on a probability-design random sample, is conducted for The Conference Board by Nielsen, a leading global provider of information and analytics about consumer behavior.