US Consumer Confidence Weakens Slightly in June

Introduction

US consumer confidence dipped slightly in June, reflecting ongoing concerns about future economic conditions despite a modest improvement in the current labor market. The Conference Board’s Consumer Confidence Index® fell to 100.4 from 101.3 in May.

Present Situation Assessment

Consumers’ views on current business and labor market conditions showed mixed results:

• The Present Situation Index increased to 141.5 from 140.8.
• 19.6% of consumers reported business conditions as “good,” down from 20.8%.
• 38.1% of consumers found jobs “plentiful,” up from 37.0%, while those saying jobs were “hard to get” decreased slightly to 14.1%.

Future Expectations Decline

The Expectations Index, indicating consumers’ outlook for income, business, and labor market conditions, dropped to 73.0 from 74.9:

• 12.5% of consumers expect business conditions to improve, down from 13.7%.
• 16.7% anticipate worsening conditions, a slight decrease from 16.9%.
• Expectations for more jobs fell to 12.6% from 13.1%, with fewer expecting job losses (17.3% down from 18.8%).

Income and Financial Concerns

Consumer sentiment towards future income deteriorated:

• 15.2% expect an increase in income, down from 17.7%.
• 11.7% anticipate a decrease, a slight rise from 11.5%.
• Views on family financial situations over the next six months were less positive.

Inflation and Spending Plans

Inflation expectations for the next 12 months decreased marginally to 5.3% from 5.4%. High food and grocery prices continue to be a major concern. While stock market optimism remains, with 48.4% expecting price increases, only 23.5% foresee declines. Plans for major purchases like homes and cars remain low, although intentions to buy appliances and smartphones showed a slight uptick. Vacation plans within the US are increasing, though still below pre-pandemic levels.

Market Forecast

Bearish Outlook The dip in consumer confidence, especially in future expectations, suggests a cautious outlook for the market. Persistent concerns about income and business conditions, coupled with modest improvements in the labor market, indicate potential challenges ahead. Traders should remain vigilant, especially if further weaknesses in the labor market arise.