Consumer Confidence Ticks Up in June

New York—U.S. consumer confidence inched up slightly in June as oil prices fell, though views on the current labor market softened.

The Conference Board’s monthly Consumer Confidence Index increased to 91.2 in June from a downwardly revised 90.6 in May.

“Consumer confidence inched up in June as falling oil prices in recent weeks provided some relief to consumer inflation fears,” said Dana M. Peterson, chief economist at The Conference Board. 

The survey was conducted June 1–23, which included an extension of the U.S.-Iran ceasefire agreement, noted the organization.

The Conference Board’s Present Situation Index, which measures consumers’ current view of business and labor market conditions, fell to 116.4 in June from a downwardly revised 119.4 in May.

Consumers’ view of current business conditions improved slightly since May, but their view of the current labor market was more pessimistic.

The percentage of consumers saying jobs were “hard to get” rose to 23 percent, the highest level since January 2021.

The Expectations Index, which measures consumers’ outlook on income, business, and labor market conditions in the near future, rose to 74.4 in June from a downwardly revised 71.4 in May.

It marked the 17th consecutive month that expectations remained below the threshold of 80, a level which typically signals a recession is ahead, according to The Conference Board.

Consumers said they expect to see little change in the labor market six months from now, though this was offset by improving expectations for business conditions and incomes.

By demographic, confidence for consumers under the age of 35 was the highest, but confidence for all age groups trended downward on a six-month moving average basis.

By income, confidence on a six-month moving average basis was mixed or little changed.

By generation, confidence fell the most for those in the Silent Generation, but was steady or lower for others.

By political affiliation, Republicans were less positive while confidence among Democrats and Independents rose.

Consumers’ write-in responses about the economy skewed pessimistic in June, with frequent references to prices as well as oil and gas.

Fewer respondents mentioned war, geopolitics, and conflict, which The Conference Board said, reflects “some easing of consumer concerns about the inflationary impacts of the war in the Middle East.”

Consumers’ average and median 12-month inflation expectations eased compared with May.

Most consumers (62 percent) expect to see higher interest rates over the next 12 months.

“Equity market volatility, notwithstanding, the second half of the June survey period included an extension of the U.S.-Iran ceasefire and likely influenced consumer expectations of even higher stock prices a year from now,” said The Conference Board.

Consumers’ views of their family’s current financial situation were more pessimistic for the third month in a row, with around the same number of people saying things are good as those saying things are bad.

However, views of their family’s future financial situations were more optimistic.

Overall expectations for a recession in the next 12 months remain low, but more respondents said it is “somewhat likely” while fewer said it was “not likely.”

These measures are not included when calculating the Consumer Confidence Index.

Consumers still plan to buy big-ticket items over the next six months, with a modest rise in the number of respondents saying “yes,” with more respondents shifting from “no” to “maybe.”

Plans to buy automobiles and homes rose on a six-month rolling basis. 

As for what shoppers plan to buy, furniture is a top choice followed by smartphones.

Spending plans for electronics and “white goods,” meaning household appliances, softened.

As for spending on services, responses were mixed, though some respondents shifted their answer from “no” to “maybe.”

The top category for spending was still restaurants, bars, and take-out, followed by streaming, internet, and mobile services, and then beauty and personal care.

As for travel spending in the next six months, travel plans receded in June, with a rise in international travel plans offset by a decline in domestic travel plans.

Still, expected spending on hotels, motels, airfare, and trains for personal travel was slightly higher in June.

The Consumer Confidence survey results for July are scheduled to be released on July 28.