United States consumers are less confident on the current state of the economy, according to the latest Consumer Confidence Index reading, released by The Conference Board (CB) today.
According to the CB, the Consumer Confidence Index fell to 100.4 in June, declining from 101.3 in May (revised downwards from an initial reading of 102.00).
Confident in the present, anxious about the future
While Americans’ sentiment on the economic environment right now improved, they were more pessimistic on what would happen in the future.
The CB data showed that its Present Situation Index (based on consumers’ assessment of current business and labour market conditions) increased to 141.5, up from May’s figure of 140.8.
However, their Expectations Index (consumers’ short-term outlook for income, business, and labor market conditions) fell significantly to 73.0 in June, down from 74.9 last month.
A coming US recession signalled
It’s worth noting that the Expectations Index has now had a reading of below 80 for the fifth month in a row.
According to the CB, this is usually a sign of a coming recession in the United States.
However, CB chief economist Dana Peterson did mention that “compared to May, consumers were less concerned about a forthcoming recession. However, consumers’ assessment of their Family’s Financial Situation—both currently and over the next six months—was less positive.”
A 1.8-point drop in confidence
Last month, the Conference Board’s Consumer Confidence Index registered a rise in confidence for US shoppers, with the index rising to an initial reading of 102.00 on May 28, after three consecutive months of decline.
Peterson commented that:
Confidence pulled back in June but remained within the same narrow range that’s held throughout the past two years, as strength in current labor market views continued to outweigh concerns about the future. However, if material weaknesses in the labor market appear, confidence could weaken as the year progresses.”
Expectations ahead of release
The readings were more or less expected by markets, as analysts had anticipated that consumer confidence figures would slip this month, down to a reading of 100.
What is the CB Consumer Confidence Index?
The Conference Board’s the Consumer Confidence Index are the findings a respected monthly survey which tracks prevailing business conditions and likely developments for the months ahead.
These are gathered from a wide pool of US consumers and companies throughout nine regions and eight different states.
This report details consumer attitudes, buying intentions, vacation plans, and consumer expectations for inflation, stock prices, and interest rates.
Data is available for 9 regions and the top 8 states, including by age and by income.
A high and improving score on the Consumer Confidence Index is considered an indicator of good economic times ahead for the United States, with a declining or low score indicating the opposite.
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