Saturday, July 20, 2024

Consumer confidence decreases in June

by BIZ Magazine

(The Center Square) – American consumers’ confidence decreased in June, according to newly released economic data.

The Conference Board, a leading business research nonprofit, released the data, which showed overall consumer confidence decreased to 100.4, down from 101.3 in May.

President Joe Biden saw a spike in consumer confidence to over 125 during the economic rebound from the COVID-19 pandemic-era shutdowns, but since then it has trended downward.

“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,” Dana M. Peterson, chief economist at The Conference Board, said in a statement. “However, if material weaknesses in the labor market appear, Confidence could weaken as the year progresses.”

Notably, the group’s “Expectations Index,” which measures consumers’ “short-term outlook for income, business, and labor market conditions,” dropped nearly 2 points as well.

According to The Conference Board, when the Expectations Index drops below 80, it is a sign that a recession is coming. The latest Expectations Index came in at 73, the fifth straight month below the 80 benchmark.

Inflation remains elevated, with prices up about 20% since Biden took office. Unemployment has remained relatively low but hit 4% this month.

Many experts expected an even steeper drop in confidence.

“Consumers expressed mixed feelings this month: their view of the present situation improved slightly overall, driven by an uptick in sentiment about the current labor market, but their assessment of current business conditions cooled,” Peterson said. “Meanwhile, for the second month in a row, consumers were a bit less pessimistic about future labor market conditions. However, their expectations for both future income and business conditions weakened, weighing down the overall Expectations Index.”

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