Consumer Confidence Ticks Up to 91.2 in June, Below Expectations

Consumer confidence ticked higher in June, but the gain was smaller than economists had predicted. Falling gas prices gave households some relief, but worries about the labor market kept the mood from rising much further.

The survey was conducted between June 1 and June 23.

The data indicate that a drop in gasoline prices, partly due to a Middle East ceasefire, eased some of the economic anxiety that has weighed on Americans in recent months. But perceptions of job availability worsened, and consumers foresee little improvement ahead. A current-conditions gauge declined, while a six-month expectations measure rose. An economist-tracked gauge measuring how people view employment opportunities dropped to its weakest point in over five years.

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In a statement, Dana Peterson, the Conference Board's chief economist, said: "Consumer confidence inched up in June as falling oil prices in recent weeks provided some relief to consumer inflation fears."

The share of consumers planning a vacation in the coming six months dropped to its lowest level since April 2021. On the other hand, plans to purchase a car, home, or big-ticket items like televisions all rose in June.

Eliza Winger, an economist at Bloomberg Economics, said: "Easing geopolitical tensions helped push down gasoline prices in June, giving households some relief and boosting consumer confidence. The decline in fuel costs supported a more optimistic outlook for personal finances and a modest improvement in big-ticket buying plans. The labor market remains a source of concern, however, tempering gains in the index."

Consumer sentiment as measured by the University of Michigan rose this month, yet May and June still represent the lowest and second-lowest readings in data going back to the 1970s. The Michigan survey places more weight on personal finances and living costs, whereas the Conference Board index concentrates more on labor and business conditions. Meanwhile, consumer spending has held up, supported in part by tax refunds, and U.S. hiring has been strong.

A Tuesday report indicated that U.S. job openings barely changed in May, implying steady labor demand. Thursday's June employment report is forecast to reveal a fourth consecutive month of strong job growth. The Conference Board survey also recorded a slight decline in one-year inflation expectations.

Nearly 62% of respondents continue to anticipate higher interest rates over the next year. More policymakers have been cautioning that the Federal Reserve might have to hike rates in 2024 to curb rising inflation.

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