US consumer confidence drops in June

Sentiment about the current state of the economy and the jobs market remained fairly upbeat but the near-term outlook for the economy fell, according to the Conference Board survey
AFP

Washington (AFP) – US consumer confidence retreated in June, after rising in May, likely on the belief the economy does not have much more room to grow, according to a survey released Tuesday. 

Sentiment about the current state of the economy and the jobs market remained fairly upbeat but the near-term outlook for the economy fell, according to the Conference Board survey.

The cutoff date for the survey was June 15, which was before the latest trade confrontation with China began as steep US tariffs on hundreds of Chinese goods were announced, although consumer confidence has not seemed to react to the building trade tensions.

But analysts note confidence about the outlook is sensitive to the mood on Wall Street, and stocks have been hit in recent days by the aggressive trade posture from the White House.

The Consumer Confidence Index dropped to 126.4 in June from 128.8 last month, which was a point lower than economists had expected, but remains far above the year-ago level.

The expectations index slipped four points to 103.2 — a six-month low — although it was still a bit stronger than June 2017.

Lynn Franco, the Conference Board’s director of Economic Indicators said the survey shows “expectations remain high by historical standards” but “the modest curtailment in optimism suggests that consumers do not foresee the economy gaining much momentum in the months ahead.”

Following a day when stocks fell two percent before recovering slightly, Ian Shepherdson of Pantheon Macroeconomics said, “expectations are sensitive to gas prices and the stock market, so this decline is easy to understand.”

However, he said a sustained decline was unlikely at this point “unless the ongoing trade disputes trigger a meaningful correction in stock prices.” 

The present situation index dipped a tenth of a point from the 17-year high reached in May, indicating consumers remained upbeat about the state of the economy.

The assessment of the jobs market was mixed, with fewer describing jobs as “plentiful” but fewer also saying jobs were “hard to get.”

Looking ahead six months, the survey showed the share of consumers expecting the economy to improve had fallen to 21.4 percent, while the share expecting business conditions to worsen had risen to 9.8 percent.

And fewer consumers expect to see their incomes rise in the months ahead.

However, the outlook for jobs was slightly more favorable, with 20 percent now expecting to see more jobs, while those expecting fewer jobs declined.

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