US consumer confidence experienced a decline in June, reflecting a more pessimistic outlook regarding business conditions, the job market, and income prospects. The Conference Board’s index of consumer sentiment dropped to 100.4 in June, down from a revised 101.3 reading in May. This decline was in line with the median estimate of economists in a Bloomberg survey, which anticipated a reading of 100. The index evaluates both Americans’ assessment of current economic conditions and their expectations for the next six months. The measure of Americans’ short-term expectations for income, business, and the job market fell to 73 in June, down from 74.9 in May. Notably, a reading below 80 can serve as an indicator of a potential recession in the near future. However, consumers’ perception of current conditions improved in June, rising to 141.5 compared to 140.8 in May.
Despite the dip in confidence, the Conference Board’s chief economist, Dana Peterson, noted that confidence remained within a narrow range observed over the past two years. This stability is attributed to the continued strength in current labor market perceptions, which offset concerns about the future economic landscape. While the unemployment rate edged up to 4% in May, American employers added a robust 272,000 jobs last month, signifying that businesses remain confident enough in the economy to continue hiring despite persistently high interest rates. This suggests that while there are concerns about the future economic trajectory, the current labor market remains a bright spot in the overall picture.
