Reflecting the escalation in trade and tariff tensions earlier this month, the Conference Board released a report on Tuesday showing a substantial deterioration in U.S. consumer confidence in the month of June.
The Conference Board said its consumer confidence index tumbled to 121.5 in June from a downwardly revised 131.3 in May. Economists had expected the index to dip to 132.0 from the 134.1 originally reported for the previous month.
With the much steeper than expected drop, the consumer confidence index slumped to its lowest level since hitting 120.6 in September of 2017.
“The escalation in trade and tariff tensions earlier this month appears to have shaken consumers’ confidence,” said Lynn Franco, Senior Director of Economic Indicators at the Conference Board.
She added, “Although the Index remains at a high level, continued uncertainty could result in further volatility in the Index and, at some point, could even begin to diminish consumers’ confidence in the expansion.”
With consumers offering a less favorable assessment of current business and labor market conditions, the present situation index plunged to 162.6 in June from 170.7 in May.
Consumers claiming current business conditions are “good” fell to 36.7 percent from 38.4 percent, although those saying business conditions are “bad” also dipped to 10.9 percent from 11.7 percent.
The Conference Board said consumers saying jobs are “plentiful” edged down to 44.0 percent from 45.3 percent, while those claiming jobs are “hard to get” jumped to 16.4 percent from 11.8 percent.
Consumers were also less optimistic about the short-term outlook, with the expectations index plummeting to 94.1 in June from 105.0 in May.
The percentage of consumers expecting business conditions will be better six months from now fell to 18.1 percent from 21.4 percent and those expecting business conditions will worsen rose to 13.1 percent from 8.8 percent.
The outlook for the labor market was also less favorable, with consumers expecting more jobs in the months ahead slipping to 17.3 percent from 18.4 percent and those anticipating fewer jobs inching up to 14.8 percent from 13.0 percent.
On Friday, the University of Michigan is scheduled to release its revised reading on consumer sentiment in the month of June.
The consumer sentiment index for June is expected to be unrevised from the preliminary reading of 97.9, which was down from 100.0 in May.
The material has been provided by InstaForex Company – www.instaforex.com