A key measure of household economic sentiment dipped in June as confidence about future income and business conditions declined.
The Conference Board’s consumer confidence index fell to 100.4 from a downwardly revised 101.3. The May reading was initially reported at 102 and economists had forecast a June reading of 100.0.
The index was dragged down by the expectations component, which asks Americans about their assessment of the near-term future for business conditions, income, and labor markets. The expectations index fell to 73.0 from 74.9.
Readings below 80 for the expectations gauge typically signal a looming recession. This is the fifth consecutive month in which the index has been in recession-forecasting territory.
The present situation index, on the other hand, rose. Consumers grew more confident in current labor market conditions, offsetting a decline in their assessment of current business conditions.
“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,” said Dana M. Peterson, Chief Economist at The Conference Board.
Peterson pointed out that the decline in confidence was centered on consumers between the ages of 35 and 54. Younger and older consumers saw confidence improve.
Consumers expressed less concern about a looming recession but their assessment of their own family’s financial situation worsened, both in terms of current conditions and expectations over the next six months.
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