WASHINGTON – The sentiment of Americans towards the U.S. economy took a step back in June, marking a return to the downward trend that has plagued consumer confidence since the COVID-19 crisis years ago.
The Conference Board reported on Tuesday that its consumer confidence index decreased to 93 for the month of June, down 5.4 points from May’s figure of 98.4. This comes after what was a momentary improvement the previous month.
This decline caught economists off guard, as many had predicted a slight rise for June.
Back in April, confidence in the U.S. economy hit its lowest level since May 2020, influenced largely by worries over President Donald Trump’s imposition of tariffs.
A measurement of Americans’ immediate outlook for their income, business climate, and job market fell by 4.6 points to 69. This figure remains significantly below 80, a threshold that can often indicate a forthcoming recession.
Consumers’ evaluations of the current economic conditions dropped by 6.4 points to 129.1.
The Conference Board highlighted that tariffs and their potential effects on personal financial situations continue to be major concerns among respondents.
Trump’s assertive and unpredictable approach, which includes large tariffs on imports, has substantially clouded the economic and employment outlook, leading to concerns that a recession may be unavoidable.
Fears of an impending recession within the next year slightly rose in June and remain at high levels.
According to the Conference Board, all three segments of the expectations index — future business conditions, job opportunities, and income — weakened.
This marks the sixth consecutive month of declining perceptions regarding the job market, even as the reading stays positive, with the U.S. labor market still showing job growth.
The Labor Department reported earlier that while hiring did slow down in May, employers still successfully added 139,000 jobs in the face of tariff-related uncertainty. The unemployment rate remains at a historically low 4.2%.
Although inflation concerns decreased slightly in June, it remains a prominent issue, with respondents frequently citing rising prices along with tariffs.
A government analysis earlier this month revealed that consumer prices advanced by 2.4% in May, up from a 2.3% increase year-over-year in April. Excluding the volatile categories of food and energy, core prices rose 2.8% for the third consecutive month. Economists focus on core prices to better gauge the trajectory of inflation.
The Conference Board noticed a slight increase in mentions of geopolitical issues and social unrest compared to previous months, although they are still lower on the list of consumer concerns.
The gathering of survey data concluded on June 18, just before U.S. plans for targeting Iranian nuclear sites surfaced but after Israel’s bombing in Tehran.
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