U.S. consumer confidence unexpectedly declined in June, underscoring concerns about the potential economic and job market impacts of higher U.S. import duties. The Conference Board’s gauge of confidence decreased 5.4 points to 93.
The decline erased nearly half of the sharp gain in May. Economists polled by Reuters had forecast the Index increasing to 100.0.
The Present Situation Index, based on consumers’ assessment of current business and labor market conditions, fell 6.4 points to 129.1. The Expectations Index, based on consumers’ outlook for income, business, and labor market conditions over the next six months, fell 4.6 points to 69.0, substantially below the threshold of 80, which typically signals a recession ahead.
“Consumer confidence weakened in June, erasing almost half of May’s sharp gains,” said Stephanie Guichard, senior economist, Global Indicators at The Conference Board, in a statement. “The decline was broad-based across components, with consumers’ assessments of the present situation and their expectations for the future both contributing to the deterioration. Consumers were less positive about current business conditions than May. Their appraisal of current job availability weakened for the sixth consecutive month but remained in positive territory, in line with the still-solid labor market.
“The three components of the Expectations Index—business conditions, employment prospects and future income—all weakened. Consumers were more pessimistic about business conditions and job availability over the next six months, and optimism about future income prospects eroded slightly,” Guichard continued.
The Conference Board found that June’s retreat in confidence was shared by all age groups, almost all income groups, across all political affiliations, with the largest decline among Republicans.
Guichard added, “Consumers’ write-in responses revealed little change since May in the top issues impacting their views of the economy. Tariffs remained on top of consumers’ minds and were frequently associated with concerns about their negative impacts on the economy and prices. Inflation and high prices were another important concern cited by consumers in June. However, there were a few more mentions of easing inflation compared to last month. This is in line with a cooling in consumers’ average 12-month inflation expectations to 6.0 percent (down from 6.4 percent in May and 7 percent in April). References to geopolitics and social unrest increased slightly from previous months but remained much lower on the list of topics affecting consumers’ views.”
Consumers’ outlook on stock prices continued to recover from April’s 16-month low, with 45.6 percent expecting stock prices to increase over the next 12 months in June, up from 37.6 percent in April. Regarding interest rates, 57 percent expected rates to rise, the highest share since October 2023.
Consumers’ views of their family’s current financial situation remained solid but deteriorated slightly; however, consumers’ expectations regarding their family’s future economic situation improved to a four-month high.
The share of consumers expecting a recession over the next 12 months rose slightly in June and remained above the levels seen in 2024.
