In June, Americans’ perception of the economy took a downturn, marking the lowest consumer confidence level since the onset of the Covid-19 pandemic five years ago. The latest consumer confidence index fell to 93, down 5.4 points from 98.4 in May, which was a slight increase from the previous month.
This decline surprised many economists who were anticipating a small rise in consumer confidence this time. Back in April, confidence had already dipped to the lowest level since May 2020, primarily due to worries surrounding President Trump’s tariffs.
Short-term expectations regarding personal income, business conditions, and the job market dropped by 4.6 points to 69. Additionally, consumers rated their current economic situation lower by 6.4 points, coming in at 129.1. Many consumers are still concerned about how tariffs might affect their finances, as highlighted by the conference committee.
Trump’s unpredictable policies and significant import taxes have contributed to uncertainties around the economy and job market, raising fears of a looming recession. Research indicates that consumer anxieties about a recession in the next year have grown slightly and continue to increase.
The conference committee pointed out that three key expectations—business conditions, employment outlook, and future income—have all weakened. Notably, respondents’ views on the job market have been declining for six consecutive months, although the job market itself remains stable with ongoing job creation.
Earlier this month, the Labor Bureau noted that while US employers delayed hiring in May, 139,000 jobs were added amid uncertainty due to tariffs, and the unemployment rate is relatively low at 4.2%.
Concerns about inflation decreased somewhat in June, but it is still a significant worry among respondents, many of whom associate rising prices with tariffs. A government report revealed a 2.4% increase in consumer prices for May, slightly up from 2.3% the previous year in April. Core prices, excluding food and energy, increased by 2.8% for the third month in a row, drawing attention from economists who view them as an important indicator of overall inflation trends.
The board noted a slight increase in respondents referencing geopolitical issues and social unrest, although overall consumer concerns remain significantly lower than before.
The survey responses were collected by June 18th, amidst ongoing tensions related to US actions targeting Iranian nuclear sites after recent military actions by Israel.
