Macro Flash Report

Consumer Confidence

Takeaway: Consumer confidence data fell in June and has been in a downtrend since the beginning of the year. This was largely driven by deteriorating expectations, while current conditions are holding up, comparatively.

Conference Board (white) & University of Michigan Consumer Confidence (blue)

June’s Conference Board Consumer Confidence slightly weakened, falling to 100.4 from May’s downwardly revised 101.3, yet exceeded market expectations of a decline to 100.0. Key insights from the report include:

  • The Present Situation Index rose to 141.5 from 140.8 in May.
    • Consumers’ assessment of current business conditions became slightly less positive.
    • Consumers’ appraisal of the labor market improved.
  • The Expectations Index dipped to 73.0 from 74.9 in May, marking the fifth consecutive month below the “recession- signaling threshold” of 80.
    • Consumers were less optimistic about short-term business conditions.
    • Consumers’ outlook on the short-term labor market was slightly less negative.
    • Consumers’ assessment of their short-term income prospects worsened.
  • The percentage of consumers expecting higher interest rates over the next twelve months fell to 52.6%, the lowest since February.

Similarly, the preliminary data for June’s University of Michigan consumer surveys showed a slight weakening. Key points include:

  • The Expectations subindex decreased to 67.6, the lowest since December 2023 and below market expectations of 70.
  • Consumer Sentiment fell for a third consecutive month to 65.6, the lowest since November, from 69.1 in May and well below forecasts of 72.
  • 1-Year Inflation Expectations remained at a six-month high of 3.3%, unchanged from the prior month.
  • The 5-Year Inflation Expectations edged up to a seven-month high of 3.1%, compared to 3% in each of the previous two months.