The Conference Board’s consumer confidence index dropped to 93.0 in June from 98.4 in May, surprising analysts who had expected an increase.
U.S. consumer confidence weakened amid growing concerns about job availability, reflecting softening labor market conditions amid rising uncertainty due to the Trump administration’s tariffs, according to a report by Lucia Mutikani.
The decline in confidence was broad-based, affecting nearly all age groups, income levels, and political affiliations—with the largest drop seen among Republicans.
Consumers remain preoccupied with import tariffs and showed indecision about making big-ticket purchases. While fewer expected their incomes to rise, perceptions of current finances remained stable.
“The share of consumers viewing jobs as plentiful was the smallest since March 2021,” aligning with elevated unemployment claims and slower job growth, the report noted.
Tim Quinlan, senior economist at Wells Fargo, commented, “Worry over prices in tandem with a diminished share of consumers who expect their household incomes to increase over the next six months points to still-elevated household financial anxieties.”
Quinlan added, “Our forecast still calls for a stall in spending in the second half of this year. We have been making the case that what looks like resilience in retail spending in recent months may in fact be an indication of pulled-forward demand ahead of the full price impact of tariffs and that those outlays are apt to be curtailed in coming months.”
The Conference Board’s consumer confidence index erased nearly half of May’s sharp gain, falling 5.4 points to 93.0 in June. Economists surveyed by Reuters had predicted the index would rise to 100.0.
The survey, which cut off June 18 before recent geopolitical escalations, noted that “references to geopolitics and social unrest increased slightly from previous months but remained much lower on the list of topics affecting consumers’ views.”
The share of consumers who described jobs as “plentiful” fell to 29.2%, the lowest since March 2021, down from 31.1% in May. Meanwhile, 18.1% said jobs were “hard to get,” slightly down from 18.4% last month.
The labor market differential—measuring the gap between those seeing jobs as plentiful versus hard to get—narrowed to a four-year low of 11.1 from 12.7 in May. This figure tends to correlate with the unemployment rate in official Labor Department reports.
Economists warn that combined with the high number of unemployment benefit recipients, the jobless rate could rise to 4.3% in June from 4.2% in May.
“Given the concurrent rise in continuing jobless claims, it looks increasingly likely that the unemployment rate will rise to 4.3% in next week’s employment report,” said JPMorgan economist Abiel Reinhart.
One-year inflation expectations among consumers eased to 6.0% in June from 6.4% in May, but the share expecting interest rates to increase reached the highest level since October 2023.
Federal Reserve Chair Jerome Powell told Congress on Tuesday that the Fed needs more time to assess whether tariffs have driven up inflation before considering rate cuts. The Fed kept its benchmark interest rate steady last week in the 4.25%–4.50% range.
Following the report, Wall Street stocks rose, the dollar weakened against a basket of currencies, and U.S. Treasury yields fell.
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