In June, Americans’ short-term expectations for income, business prospects, and job market conditions declined to a reading of 73, down from 74.9 in May, just below the threshold that historically signals potential economic downturns.
Conversely, consumers’ assessment of current conditions improved, rising to 141.5 from 140.8 in May, reflecting robust views on the present state of the economy.
Dana Peterson, Chief Economist at the Conference Board, commented on the latest data, noting, “Confidence retreated slightly in June but remained stable within the narrow range observed over the past two years. Current labor market optimism continues to outweigh concerns about future economic prospects.”
Despite the unemployment rate edging up to 4% in May, U.S. employers added a substantial 272,000 jobs, underscoring continued economic confidence despite persistent high interest rates. The strong job gains were driven by increased consumer spending on travel, entertainment, and other services, as evidenced by near-record traffic at U.S. airports over the Memorial Day weekend.
However, signs of labor market softening are emerging. Job postings for April hit their lowest levels since 2021, and the number of Americans receiving unemployment benefits has risen for seven consecutive weeks.
The mixed signals in consumer confidence and labor market indicators suggest a cautious outlook, as the economy navigates through varying levels of economic strength and potential challenges.
