U.S. Consumer Confidence Declined Again in June as Expectations Dipped
By Xavier Fontdegloria
Consumer confidence in the U.S. fell in June for a second
consecutive month as Americans' views on the short-term outlook
deteriorated markedly amid persistently high inflation.
Private research group The Conference Board said Tuesday that
its consumer confidence index fell to 98.7 in June from a revised
103.2 in May, the lowest reading since February 2021. Economists
polled by The Wall Street Journal expected the index to decline to
The drop in confidence was driven by a sharp decrease of the
expectations index, which gauges short-term outlook for income,
business and labor-market conditions. The indicator fell to 66.4
from 73.7, its lowest level since March 2013.
"Consumers' grimmer outlook was driven by increasing concerns
about inflation, in particular rising gas and food prices," said
Lynn Franco, The Conference Board's senior director of economic
The current subdued level of the expectations index suggests
weaker growth in the second half of 2022 as well as growing risk of
recession by year end, she said.
U.S. inflation reached 8.6% in May, its highest level in more
than four decades as surging energy and food costs pushed prices
Vacation plans among Americans softened over the month amid
rising prices, Ms. Franco said. Purchasing intentions for
big-ticket items such as cars, homes and major appliances held
relatively steady in June, but are set to cool in the coming months
as the Federal Reserve raises interest rates, she said.
Consumer confidence is a closely watched indicator that can be a
bellwether for household spending, which is a major growth driver
for the U.S. economy.
The Conference Board's gauge stands well below its prepandemic
levels, but worsening confidence hasn't caused a significant
pullback in consumer spending as a strong labor market supports
"A strong labor force has provided insulation from many of the
inflationary headwinds denting sentiment and clouding the
macroeconomic picture, and I expect overall consumption to remain
healthy until the labor market begins to crack," said Matt Orton,
Chief Market Strategist at Carillon Tower Advisers.
In June, Americans were slightly less optimistic about the labor
market, albeit consumers still viewed the job conditions as
The present situation index, based on consumers' assessment of
current business and labor market conditions, fell slightly to
147.1 in June from 147.4 in May.
"Looking ahead over the next six months, consumer spending and
economic growth are likely to continue facing strong headwinds from
further inflation and rate hikes," Ms. Franco from The Conference
Write to Xavier Fontdegloria at firstname.lastname@example.org
(END) Dow Jones Newswires
June 28, 2022 10:45 ET (14:45 GMT)
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