Consumer Confidence in U.S. Economy Declines Again

By Associated Press

WASHINGTON (AP) — In a concerning turn of events, Americans’ perception of the U.S. economy has deteriorated once more in June, marking a return to a prolonged downward trend that has seen consumer confidence plummet to levels not seen since the onset of the COVID-19 pandemic.

Key Findings from the Conference Board

The Conference Board reported on Tuesday that its consumer confidence index dropped to 93 in June, down by 5.4 points from 98.4 the previous month. This decline caught economists off-guard, as many had anticipated a modest improvement.

Historical Context

In April, confidence reached its nadir since May 2020, heavily influenced by concerns surrounding the economic implications of President Donald Trump’s tariffs. This resurgence of anxiety has raised alarms over the potential for a recession.

Consumer Confidence Breakdown

The index reflecting Americans’ short-term expectations regarding income, business conditions, and job opportunities fell by 4.6 points to 69. This figure is significantly below the 80-point threshold that often signals an upcoming recession.

Consumers’ evaluations of the current economic climate also declined, with assessments plummeting 6.4 points to 129.1.

Ongoing Concerns Over Tariffs

The impact of tariffs remains a primary concern for survey respondents, with many expressing worries that Trump’s unpredictable policies — especially the heavy import taxes — are casting a shadow over the economy and job market. As a result, fears of a recession in the upcoming year have slightly heightened but remain significant.

Job Market Outlook Weakens

For six consecutive months, consumer perspectives on the job market have worsened, although it remains in a generally positive range due to the ongoing job creation in the U.S. The Labor Department reported that while hiring slowed in May, employers still added a healthy 139,000 jobs, and the unemployment rate stands at a historic low of 4.2%.

Inflation Remains a Major Concern

Despite a slight decrease in inflation concerns noted in June, it remains a serious issue for many respondents. Consumers frequently mentioned rising prices in association with tariffs. The latest government data shows that consumer prices increased to 2.4% in May, up from a 2.3% increase in April. Core prices — which exclude more volatile food and energy costs — have remained steady at 2.8% for three months, an important indicator for economic analysts.

Shifting Global Concerns

The Conference Board noted a rise in references to geopolitical instability and social unrest among consumers compared to previous months, though these concerns are still not at the forefront of consumer anxiety.

The survey cutoff was on June 18, prior to U.S. attacks on Iranian nuclear sites and following Israel’s bombing of Tehran, hinting at the evolving geopolitical landscape’s impact on consumer perception.