Consumer confidence moderated this month, according to new data from The Conference Board. Specifically, the headline sentiment gauge fell from May’s downward-revised 131.3 print to 121.5 in June. That was the lowest reading since September 2017, and surveyed Americans’ assessments of both current and future economic conditions deteriorated. The sharp reversal in optimism may seem a bit confusing since the stock market recently climbed to a new all-time high, and gasoline prices have declined for seven consecutive weeks. The still unresolved trade war is likely one factor behind June’s weaker print because the headline index rose in May to one of the best readings of the current business cycle, but the survey for that month was largely conducted ahead of the latest escalation in geopolitical tensions.
Lynn Franco, Senior Director of Economic Indicators at The Conference Board, added that “although the index remains at a high level, continued [trade] uncertainty could result in further volatility in the index and, at some point, could even begin to diminish consumers’ confidence in the expansion.” Apart from the trade-related giveback, overall consumer sentiment in June appears to have also been weighed down by somewhat less optimistic expectations for job availability and income growth. The disappointing May job report that received a lot of attention in the media earlier this month is likely responsible for the softer outlook, but most other indicators remain at historically strong levels that are consistent with a healthy pace of job creation and continued wage gains. A more detailed look at the employment landscape in America can be found in our Labor Market Snapshot, one of a growing series of economic reports we update regularly.
Sources: The Conference Board, U.S. DoL, BIG, Bloomberg, FRBSL