Consumers' Persistent Concerns about the Future Continues to Weigh on Confidence
NEW YORK, June 25, 2024 /PRNewswire/ -- The Conference Board Consumer Confidence Index® dipped in June to 100.4 (1985=100), down from 101.3 in May. The Present Situation Index—based on consumers' assessment of current business and labor market conditions—increased to 141.5 (1985=100) from 140.8 last month.
However, the Expectations Index—based on consumers' short-term outlook for income, business, and labor market conditions—fell to 73.0 (1985=100) in June, down from 74.9 in May. The Expectations Index has been below 80 (the threshold which usually signals a recession ahead) for five consecutive months.
"Confidence pulled back in June but remained within the same narrow range that's held throughout the past two years, as strength in current labor market views continued to outweigh concerns about the future. However, if material weaknesses in the labor market appear, Confidence could weaken as the year progresses," said Dana M. Peterson, Chief Economist at The Conference Board.
"Consumers expressed mixed feelings this month: their view of the present situation improved slightly overall, driven by an uptick in sentiment about the current labor market, but their assessment of current business conditions cooled. Meanwhile, for the second month in a row, consumers were a bit less pessimistic about future labor market conditions. However, their expectations for both future income and business conditions weakened, weighing down the overall Expectations Index. The decline in confidence between May and June was centered on consumers aged 35-54. By contrast, those under 35 and those 55 and older saw confidence improve this month. No clear pattern emerged in terms of income groups. On a six-month moving average basis, confidence continued to be highest among the youngest (under 35) and wealthiest (making over $100K) consumers."
Peterson added: "Compared to May, consumers were less concerned about a forthcoming recession. However, consumers' assessment of their Family's Financial Situation—both currently and over the next six months—was less positive." (These measures are not included in calculating the Consumer Confidence Index®)
Average 12-month inflation expectations ticked down slightly from 5.4 percent to 5.3 percent. June's write-in responses revealed that elevated prices, especially for food and groceries, continued to impact consumers' views of the economy, followed by the labor market and US political situation. Notably, the share of respondents believing the 2024 election would impact the economy was low in comparison to write-ins in June of 2016 and slightly higher than in 2020.
Consumers were positive about the stock market, with 48.4 percent expecting stock prices to increase over the year ahead, compared to 23.5 percent expecting a decrease and 28.1 percent expecting no change. Meanwhile, the share of consumers expecting higher interest rates over the next twelve months dropped to 52.6 percent, its lowest level since February.
On a six-month moving average basis, purchasing plans for homes were largely unchanged and remained historically low in June. Buying plans for cars also stalled. Meanwhile, buying plans for most big-ticket appliances and smartphones increased slightly, though fewer consumers planned to buy a laptop or a PC.
The share of consumers planning a vacation† over the next six months continued to increase and remains above last June's level. More consumers planned to vacation in the US than abroad. As in recent years, more people plan to travel by car than by plane. Overall, the share of consumers planning to go on vacation is still about 10 percentage points lower than pre-pandemic.
Present Situation
Consumers' assessment of current business conditions was, on balance, slightly less positive in June.
- 19.6% of consumers said business conditions were "good," down from 20.8% in May.
- But 17.7% said business conditions were "bad," also down from 18.4% last month.
Consumers' appraisal of the labor market improved in June.
- 38.1% of consumers said jobs were "plentiful," up from 37.0% in May.
- 14.1% of consumers said jobs were "hard to get," down from 14.3%.
Expectations Six Months Hence
Consumers were less optimistic about the short-term business conditions outlook in June.
- 12.5% of consumers expected business conditions to improve, down from 13.7% in May.
- 16.7% expected business conditions to worsen, down from 16.9%.
Consumers' assessment of the short-term labor market outlook was a tad less negative in June.
- 12.6% of consumers expected more jobs to be available, down from 13.1% in May.
- 17.3% anticipated fewer jobs, down from 18.8% last month.
Consumers' assessment of their short-term income prospects deteriorated in June.
- 15.2% of consumers expected their incomes to increase, down from 17.7% in May.
- 11.7% expected their incomes to decrease, up from 11.5%.
Assessment of Family Finances and Recession Risk
- Consumers' assessment of their Family's Current Financial Situation weakened in June.
- Consumers' assessment of their Family's Financial Situation going forward was virtually unchanged.
- Consumers' Perceived Likelihood of a US Recession over the Next 12 Months pulled back in June, after rising in both May and April.
The monthly Consumer Confidence Survey®, based on an online sample, is conducted for The Conference Board by Toluna, a technology company that delivers real-time consumer insights and market research through its innovative technology, expertise, and panel of over 36 million consumers. The cutoff date for the preliminary results was June 19.
† NOTE: As part of our regular efforts to enhance the quality of our data, the seasonal adjustments procedure for the bi-monthly vacation intention responses has been upgraded. The data are now seasonally adjusted using an X-12 procedure, in line with the seasonal adjustments applied to other consumer confidence survey data.
Source: June 2024 Consumer Confidence Survey®
The Conference Board
The Conference Board publishes the Consumer Confidence Index® at 10 a.m. ET on the last Tuesday of every month. Subscription information and the technical notes to this series are available on The Conference Board website: https://www.conference-board.org/data/consumerdata.cfm.
About The Conference Board
The Conference Board is the member-driven think tank that delivers Trusted Insights for What's Ahead™. Founded in 1916, we are a non-partisan, not-for-profit entity holding 501 (c) (3) tax-exempt status in the United States. ConferenceBoard.org.
SOURCE The Conference Board
Share this article