Consumer Confidence Seesaws Between May and June

With the wild swings in tariff percentages and possible repercussions from a war in the Middle East, consumers are understandably nervous. However, it all comes down to one thing: the economy. Regardless of age, income, or political affiliation, people’s confidence in the economy seems to depend on the news making headlines on any given day.

This week, the Conference Board Consumer Confidence Index® dropped by 5.4 points in June, falling to 93.0 (1985=100) from 98.4 in May. The Present Situation Index – based on consumers’ assessment of current business and labor market conditions – fell 6.4 points to 129.1.

The Expectations Index – which is based on consumers’ short-term outlook for income, business, and labor market conditions – fell 4.6 points to 69.0, substantially below the threshold of 80 that typically signals a recession ahead. The cutoff date for preliminary results was June 18.

“Consumer confidence weakened in June, erasing almost half of May’s sharp gains,” said Stephanie Guichard, senior economist, Global Indicators at The Conference Board. “The decline was broad-based across components, with consumers’ assessments of the present situation and their expectations for the future both contributing to the deterioration. Consumers were less positive about current business conditions than May. Their appraisal of current job availability weakened for the sixth consecutive month, but remained in positive territory in line with the still-solid labor market. The three components of the Expectations Index – business conditions, employment prospects, and future income – all weakened. Consumers were more pessimistic about business conditions and job availability over the next six months, and optimism about future income prospects eroded slightly.”

Guichard added, “Consumers’ write-in responses revealed little change since May in the top issues impacting their views of the economy. Tariffs remained on top of consumers’ minds and were frequently associated with concerns about their negative impacts on the economy and prices. Inflation and high prices were another important concern cited by consumers in June. However, there were a few more mentions of easing inflation compared to last month. This is in line with a cooling in consumers’ average 12-month inflation expectations to 6.0% (down from 6.4% in May and 7% in April). References to geopolitics and social unrest increased slightly from previous months, but remained much lower on the list of topics affecting consumers’ views.”

Consumers’ outlook on stock prices continued to recover from April’s 16-month low, with 45.6% expecting stock prices to increase over the next 12 months in June, up from 37.6% two months ago. Regarding interest rates, 57% expected rates to rise, the highest share since October 2023.   

When it comes to ranking “Family’s Current Financial Situation,” results remained solid, but deteriorated slightly. However, consumers’ expectations regarding their “Family’s Future Financial Situation” improved to a four-month high. The share of consumers expecting a recession over the next 12 months rose slightly in June and remained above the levels seen in 2024.  (These measures are not included in calculating the Consumer Confidence Index®).

Purchasing plans for cars were steady at the highest level since December 2024, while purchasing plans for homes declined. Compared to May, more consumers were undecided about plans to buy big-ticket items overall. Buying plans for most appliances were slightly up while plans to buy electronics goods were down. The intention to purchase more services in the months ahead weakened compared to May, with almost all services categories declining.

Present Situation

Consumers’ assessments of current business conditions were less positive in June.

• 19.0% of consumers said business conditions were “good,” down from 21.4% in May.

• 15.3% said business conditions were “bad,” up from 13.7%.

• Consumers’ views of the labor market cooled somewhat in June.

• 29.2% of consumers said jobs were “plentiful,” down from 31.1% in May.

• 18.1% of consumers said jobs were “hard to get,” down slightly from 18.4%.

6-Month Outlook     

Consumers were more pessimistic about future business conditions in June.

• 16.7% of consumers expected business conditions to improve, down from 19.9% in May.

• 24.0% expected business conditions to worsen, down from 25.4%.

• Consumers’ outlook for the labor market also became more negative in June.

• 15.4% of consumers expected more jobs to be available, down from 18.6% in May.

• 25.9% anticipated fewer jobs, down slightly from 26.2%.

• Consumers’ outlook for their income prospects was, on balance, moderately less positive in June.

• 16.3% of consumers expected their incomes to increase, down from 18.6% in May.

• 12.4% expected their income to decrease, down from 13.5%.

Assessment of Family Finances and Recession Risk

Consumers’ opinion of their “Family’s Current Financial Situation” remained solid in June, and their assessments of their “Family’s Expected Financial Situation” also improved.

However, consumers’ “Perceived Likelihood of a U.S. Recession over the Next 12 Months” remained elevated.

The monthly Consumer Confidence Survey®, based on an online sample, is conducted for The Conference Board by technology company Toluna.