Conference Board index falls to 93.0 as labor worries grow
Consumer confidence in the United States took a sharp turn downward in June, with rising fears over job security and economic uncertainty tied to Trump’s tariff policies weighing heavily on households. The Conference Board’s index dropped to 93.0, well below the 100.0 forecast, wiping out nearly half of May’s gain.
The decline was widespread, cutting across age, income, and political groups. Republicans, in particular, showed the steepest fall in sentiment. Analysts linked the slump to growing concerns over and reduced optimism around future income growth.
Labor market outlook dims
The share of respondents saying jobs are “plentiful” slid to 29.2%, the lowest since early 2021. Meanwhile, 18.1% of Americans said jobs were “hard to get.” The labor market differential—a leading indicator for unemployment—fell to 11.1, the weakest since June 2020.
With unemployment claims rising and job growth slowing, economists now warn the jobless rate could reach 4.3% in June. “We’ve seen resilience in consumer spending, but it’s likely demand was pulled forward ahead of higher prices,” said Tim Quinlan of Wells Fargo. “The risk of a second-half spending slowdown is real.”
Fed policy in focus as inflation expectations fall
While short-term inflation expectations dipped to 6.0%, the share of consumers anticipating higher interest rates hit its highest level since late 2023. Speaking on Capitol Hill, Fed Chair Jerome Powell said the central bank would hold rates steady for now but hinted at potential cuts if inflation pressures from tariffs ease.
Markets responded positively. Stocks climbed, the dollar retreated, and bond yields edged lower. The S&P 500 and Nasdaq hit near-record highs amid hopes for monetary easing later this year.
Housing, spending outlook weakens
Consumers also showed less appetite for major purchases, including homes, appliances, and domestic travel. Vacation plans held steady, but intentions to buy property declined, with higher mortgage rates continuing to limit affordability.
A separate report from the Federal Housing Finance Agency showed U.S. home prices dropped 0.4% in April—the first monthly decline since 2022. Annual home price growth slowed to 3.0%, with Florida and other pandemic boom markets facing possible price corrections.
