U.S. Consumer Confidence Declines in June; Inflation Expectations Fall
by:Tom Moeller
|in:Economy in Brief
Summary
- Decline reverses part of May increase
- Both expectations and present situation readings drop.
- Inflation expectations fall to three-month low.
The Conference Board's Index of Consumer Confidence declined 5.5% (-4.9% y/y) during June to 93.0 after rising a little-revised 14.8% in May to 98.4. The index fell an unrevised 8.7% in April to 85.7. A June reading of 99.8 had been expected in the Action Economics Forecast Survey. The index remained 17.6% below its November peak.
The Expectations Index declined 6.3% this month (-5.2% y/y) after rising 32.9% in May, revised from 31.4%, and falling an unrevised 17.2% in April. The Present Situation index declined 4.7% (-4.6% y/y) after rising 3.4% in in May, revised from 3.7% after declining an unrevised 2.5% in April.
The percentage of respondents assessing business conditions as “good” fell to 19.0% after jumping to 21.4% in May. The index hit a high of 22.0% in October. The percentage assessing conditions as “bad” increased to 15.3% after falling to 13.7% in May. The appraisal of labor market conditions weakened as 29.2% described it as “jobs plentiful” versus 31.1% in May. Jobs were viewed as “hard to get” by 18.1% of respondents this month, down from 18.4% in May. This measure has risen from 11.0% in January 2024. The labor market differential calculated by Haver Analytics (the percentage of consumers who think jobs are plentiful minus the percentage who believe that jobs are currently hard to get) fell to 11.1% compared to 12.7% in May and 13.7% in April. This measure remained below a high of 47.1% in March 2022. This series has a 60% correlation with the unemployment rate over the last ten years.
Expectations for business conditions deteriorated this month as a lessened 16.7% of respondents expect conditions to improve over the next six months, after rising to 19.9% in May, while 24.0% expect them to worsen, after falling to 25.4% in May. On employment, a lessened 15.4% expect the number of jobs to increase over the next six months versus 18.6% in May. The percentage expecting the number of jobs to decline in the next six months fell to 25.9% after falling sharply to 26.2% in May. A lessened 16.3% of respondents expect income to increase in six months, down from 18.4%% in May. That remained down from a high of 20.7% in November and compares to 12.4% who expect income to decrease, down from 13.5% in May.
The expected rate of price inflation over the next twelve months declined to 6.0% in June after falling to 6.4% in May. This remains up from a low of 5.0% in November. Interest rates are expected to rise this year by an increased 57.0% of respondents, and that remained up from a 45.5% November 2024 low. The percentage of respondents expecting equity prices to increase over the next twelve months rose to 45.6%, up from 44.7% in May and the most in four months, while the percentage expecting a decline in stock prices fell to 33.5% after declining to 37.2% in May.
The percentage of respondents planning to buy a home fell to 5.9% after surging to 6.7% in April. Plans to purchase an automobile held steady at 11.8% this month after falling from 10.6% in April.
The Consumer Confidence data are available in Haver’s CBDB database. The total indexes, which are indexed to 1985=100, appear in USECON, and market expectations are in AS1REPNA.
Semiannual Monetary Policy Report to the Congress by Federal Reserve Chair Jerome H. Powell is available here.
Tom Moeller
AuthorMore in Author Profile »Prior to joining Haver Analytics in 2000, Mr. Moeller worked as the Economist at Chancellor Capital Management from 1985 to 1999. There, he developed comprehensive economic forecasts and interpreted economic data for equity and fixed income portfolio managers. Also at Chancellor, Mr. Moeller worked as an equity analyst and was responsible for researching and rating companies in the economically sensitive automobile and housing industries for investment in Chancellor’s equity portfolio. Prior to joining Chancellor, Mr. Moeller was an Economist at Citibank from 1979 to 1984. He also analyzed pricing behavior in the metals industry for the Council on Wage and Price Stability in Washington, D.C. In 1999, Mr. Moeller received the award for most accurate forecast from the Forecasters' Club of New York. From 1990 to 1992 he was President of the New York Association for Business Economists. Mr. Moeller earned an M.B.A. in Finance from Fordham University, where he graduated in 1987. He holds a Bachelor of Arts in Economics from George Washington University.
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