American consumers lost some confidence in June as expectations over the near-term future fell again. The Conference Board, a business research group, said Tuesday that its consumer confidence index fell in June to 100.4 from 101.3 in May. The index’s decline was not quite as bad as analysts were expecting.
Quick Read
- U.S. consumer confidence fell in June as Americans’ expectations for the near-term future declined.
- The Conference Board’s consumer confidence index dropped to 100.4 in June from 101.3 in May, though the decline was less severe than analysts expected.
- The index measures Americans’ assessment of current economic conditions and their outlook for the next six months.
- The measure of short-term expectations for income, business, and the job market fell to 73 from 74.9 in May, with readings under 80 potentially signaling a near-term recession.
- Consumers’ view of current conditions rose slightly to 141.5 from 140.8 in May.
- Despite a slight increase in the unemployment rate to 4% in May, employers added a strong 272,000 jobs, driven by consumer spending on travel, entertainment, and other services.
- There are signs of labor market weakening, with April job postings at their lowest since 2021 and increasing unemployment benefit claims.
- San Francisco Fed President Mary Daly noted that while the labor market remains healthy, future slowing could lead to higher unemployment.
- The U.S. economy slowed sharply in Q1 to a 1.3% annual pace from 3.4% growth in Q4 2023.
- Retail sales increased just 0.1% in May, reflecting cautious spending amid high prices and interest rates.
- Consumer expectations of a recession in the next year decreased in June after rising in the previous two months.
The Associated Press has the story:
US consumer confidence falls in June as Americans fret about near-term prospects
Newslooks- (AP)
American consumers lost some confidence in June as expectations over the near-term future fell again. The Conference Board, a business research group, said Tuesday that its consumer confidence index fell in June to 100.4 from 101.3 in May. The index’s decline was not quite as bad as analysts were expecting.
The index measures both Americans’ assessment of current economic conditions and their outlook for the next six months.
The measure of Americans’ short-term expectations for income, business and the job market fell to 73 from 74.9 in May. A reading under 80 can signal a potential recession in the near future.
Consumers’ view of current conditions rose in June to 141.5, up from 140.8 in May.
“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,” said Dana Peterson, the Conference Board’s chief economist.
Even though the unemployment rate ticked up to 4% in May, America’s employers added a strong 272,000 jobs last month, a sign that companies are still confident enough in the economy to keep hiring despite persistently high interest rates.
Last month’s sizable job gain was propelled by consumer spending on travel, entertainment and other services. U.S. airports reported near-record traffic over the Memorial Day weekend.
Despite the better-than-expected job gains in May, there is some visible weakening in the labor market: job postings for April hit their lowest level since 2021 and the number of Americans who are receiving unemployment benefits has risen for seven straight weeks.
On Monday, Mary Daly, president of the San Francisco Fed, said that the labor market remained healthy but that future slowing could trigger higher unemployment, something that needs to be monitored closely.
Most economic indicators show the U.S. economy in good shape by historical standards, though there have been some signs that growth is slowing.
The nation’s economy slowed sharply in the first quarter to a 1.3% annual pace in the face of high interest rates, down from a brisk 3.4% growth rate in the final three months of 2023.
Retail sales inched up just 0.1% in May from April as still high prices on groceries and other necessities and high interest rates curbed spending.
More cautious spending in the face of inflation has some big retailers offering discounts this summer. The latest quarterly earnings reported by big retailers show that while consumers have not stopped spending, they are becoming more price-conscious and choosy.
Consumer expectations of a recession in the next year pulled back in June after rising the previous two months, the Conference Board said.
