An important measure of the economy declined in June to its lowest level since September 2017.
After three consecutive months of improvement, consumer confidence in June fellto 121.5, down from 131.3 in May, according to The Confidence Board’s Consumer Confidence Index. The decline comes as tensions between the U.S. and China over tariffs are on the rise.
“The decrease in the Present Situation Index was driven by a less favorable assessment of business and labor market conditions,” said Lynn Franco, senior director of economic indicators at The Conference Board. “The escalation in trade and tariff tensions earlier this month appears to have shaken consumers’ confidence. Although the Index remains at a high level, continued uncertainty could result in further volatility in the Index and, at some point, could even begin to diminish consumers’ confidence in the expansion.”
Consumers’ appraisal of current-day conditions declined in June. Those claiming business conditions are “good” decreased from 38.4%to 36.7%. However, those saying business conditions are “bad” also decreased, from 11.7% to 10.9%. Consumers’ assessment of the labor market was also somewhat less upbeat. Those saying jobs are “plentiful” decreased from 45.3% to 44%, while those claiming jobs are “hard to get” rose from 11.8% to 16.4%.
Consumers were less optimistic about the short-term outlook in June. The percentage of consumers expecting business conditions will be better six months from now decreased from 21.4% to 18.1% , while those expecting business conditions will worsen rose from 8.8% to 13.1%.
Consumers’ outlook for the labor market was also less favorable. The proportion expecting more jobs in the months ahead decreased from 18.4% to 17.3%, while those anticipating fewer jobs increased from 13% to 14.8%.