Consumers express ‘mixed feelings’ as confidence index dips in June

HIGH POINT—While the overall Consumer Confidence Index dipped slightly in June, the Present Situation Index saw a small increase, according to the latest release from The Conference Board.

The Consumer Confidence Index for the month of June reported at 100.4, down slightly from the 101.3 reported in May. The Present Situation Index – based on consumers’ assessment of current business and labor market conditions – increased to 141.5 from 140.8 in May.

“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.

The Expectations Index, however, fell to 73.0 from the 74.9 reported in May. An Expectations Index rating below 80 is usually the threshold for signaling a recession. The Index has now been below 80 for five consecutive months.

“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,” Peterson added. “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.”

Here’s a closer look at some details from the latest report:

Present situation

Consumers’ assessment of current business conditions was, on balance, slightly less positive in June.

  • 19.6 percent of consumers said business conditions were “good,” down from 20.8 percent in May.
  • But 17.7 percent said business conditions were “bad,” also down from 18.4 percent last month.

Consumers’ appraisal of the labor market improved in June.

  • 38.1 percent of consumers said jobs were “plentiful,” up from 37.0 percent in May.
  • 14.1 percent of consumers said jobs were “hard to get,” down from 14.3 percent.

Expectations for the next six months       

Consumers were less optimistic about the short-term business conditions outlook in June.

  • 12.5 percent of consumers expected business conditions to improve, down from 13.7 percent in May.
  • 16.7 percent expected business conditions to worsen, down from 16.9 percent.

Consumers’ assessment of the short-term labor market outlook was a tad less negative in June.

  • 12.6 percent of consumers expected more jobs to be available, down from 13.1 percent in May.
  • 17.3 percent anticipated fewer jobs, down from 18.8 percent last month.

Consumers’ assessment of their short-term income prospects deteriorated in June.

  • 15.2 percent of consumers expected their incomes to increase, down from 17.7 percent in May.
  • 11.7 percent expected their incomes to decrease, up from 11.5 percent.

See also:

  • Consumers combat cost-of-living increases with shifts in online spending
  • Consumers looking for home décor, furniture turn to small businesses

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