Consumer confidence in the US fell this month as expectations for business conditions, jobs, and personal incomes dimmed.
The Conference Board's index fell to 100.4 from a revised 101.3 in May, data released Tuesday showed. That compared with the median estimate of 100 in a Bloomberg survey of economists.
The expectations index, which measures consumers' views over the next six months, dropped almost two points to 73; the present conditions index rose from May's revised reading.
Consumer confidence has been quite depressed over the last couple of years, as consumers are facing a higher cost of living, high borrowing costs, and a recent softening in the labour market. Business conditions in the next six months are expected to improve according to only 12.5 per cent of consumers, the lowest proportion since 2011.
“Confidence pulled back in June but remained within the same narrow range that’s held throughout the past two years, as strength in current labour market views continued to outweigh concerns about the future,” Dana Peterson, chief economist at the Conference Board, said in a statement. “However, if material weaknesses in the labour market appear, confidence could weaken as the year progresses.”
Concern about prices moderated slightly this month, but consumers still feel that grocery prices are high. Inflation data for the month of May indicates there is a broad reduction in price increases across the board for US consumers.
Consumers also scaled back plans to buy motor vehicles and major appliances, often financed, as well. However, more indicated the intention to take vacations in the second half of the year, with a greater proportion planning domestic travel.
Consumer's view of the current labour market picked up slightly. About 38.1 per cent said jobs were "plentiful," up from 37 per cent in May, while few consumers said jobs were "hard to get." The gap between those numbers rose for the first time since the start of the year, a more important gauge of labour market health.
The mixed signals from the economy have left consumer confidence in a state of flux. While a subset of the elements constituting the economy is getting better, there are still enough concerns regarding future conditions and inflation. Further, into the year, improvements in the labour market and overall economic trends will be crucial for consumer outlook and confidence.