US consumers lost some confidence in June as short-term expectations fell again.
The Conference Board, an economic research group, said Tuesday that its consumer confidence index fell in June to 100.4 from 101.3 in May. The decline in the index was not as severe as analysts expected.
The index measures both Americans’ assessment of the current economic situation and their outlook for the next six months.
The index of Americans’ near-term expectations for income, business and the job market fell to 73 from 74.9 in May. A number below 80 can signal a potential recession in the near future.
Consumer opinion on the current situation increased in June to 141.5, compared to 140.8 in May.
“Confidence fell in June, but remained in the same narrow range it has remained in for the past two years, as the strength of the current labor market outlook continued to outweigh expectations. concerns about the future,” said Dana Peterson, chief economist at the Conference Board.
Even though the unemployment rate reached 4% in May, U.S. employers added 272,000 jobs last month, a sign that businesses still have enough confidence in the economy to continue hiring despite still-high interest rates.
Last month’s strong job gains were driven by consumer spending on travel, entertainment and other services. U.S. airports saw near-record traffic over the Memorial Day weekend.
Most economic indicators show the U.S. economy is healthy by historical standards, although there are signs that growth is slowing.
The country’s economy slowed sharply in the first quarter, to an annual pace of 1.3% in the face of high interest rates, down from the rapid growth rate of 3.4% in the last three months of 2023.
Retail sales rose just 0.1% in May from April as continued high prices for groceries and other essentials and high interest rates dampened spending.
More cautious spending in the face of inflation is prompting some major retailers to offer discounts this summer. The latest quarterly results released by major retailers show that although consumers have not stopped spending, they are increasingly price conscious and more demanding.
Consumer expectations of a recession next year fell in June after rising the previous two months, the Conference Board said.
ABC News
