NEW YORK, June 26, 2024 | KreditSanta News - The latest data from The Conference Board reveals a minor decline in the Consumer Confidence Index® for June, which fell to 100.4 from May's 101.3. The Present Situation Index, reflecting consumers' evaluations of current business and labor market conditions, rose slightly to 141.5 from 140.8. However, the Expectations Index, which gauges the short-term outlook for income, business, and labor market conditions, dropped to 73.0 from 74.9, remaining below the recession-signaling threshold of 80 for the fifth consecutive month.
Dana M. Peterson, Chief Economist at The Conference Board, commented, "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."
Mixed Feelings Among Consumers
"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," added Peterson.
The confidence dip was most noticeable among consumers aged 35-54, while those under 35 and over 55 showed improved confidence. There was no clear trend among different income groups.
Inflation Expectations and Financial Assessments
Inflation expectations for the next 12 months slightly decreased from 5.4% to 5.3%. Consumers continue to be affected by high prices, particularly for food and groceries, with the labor market and political situation also influencing their views. Notably, fewer respondents believe the 2024 election will impact the economy significantly compared to previous election years.
Consumers remain optimistic about the stock market, with 48.4% expecting stock prices to rise over the next year. The expectation for higher interest rates over the next 12 months dropped to 52.6%, the lowest since February.
Purchasing and Vacation Plans
On a six-month moving average basis, home buying plans stayed low, and car buying plans saw no change. There was a slight increase in plans to purchase major appliances and smartphones, though fewer consumers planned to buy laptops or PCs.
Vacation plans continue to rise, with more consumers opting for trips within the US rather than abroad. Road trips are more popular than air travel, though the overall number of consumers planning vacations is still about 10 percentage points lower than pre-pandemic levels.
Present Situation and Future Expectations
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In June, consumers' assessment of current business conditions showed a slight decline:
➙ 19.6% said business conditions were "good," down from 20.8% in May.
➙ 17.7% said business conditions were "bad," down from 18.4%.
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Labor market perceptions improved:
➙ 38.1% said jobs were "plentiful," up from 37.0% in May.
➙ 14.1% said jobs were "hard to get," down from 14.3%.
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Short-term business conditions expectations varied:
➙ 12.5% expected improvements, down from 13.7%.
➙ 16.7% expected worsening conditions, down from 16.9%.
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Short-term labor market outlook was slightly less negative:
➙ 12.6% expected more jobs, down from 13.1%.
➙ 17.3% anticipated fewer jobs, down from 18.8%.
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Short-term income expectations declined:
➙ 15.2% expected income increases, down from 17.7%.
➙ 11.7% expected income decreases, up from 11.5%.
Family Finances and Recession Views
Consumers' evaluations of their current financial situation weakened, and their outlook for future family finances remained stable. Concerns about a potential recession in the next 12 months decreased slightly after increasing in April and May.
Source: June 2024 Consumer Confidence Survey® The Conference Board