Consumer Confidence Gauge Slides Lower

A key gauge of consumer confidence moved lower in June, falling short of analysts’ expectations following an increase in May but remained high by historical standards.

The Conference Board’s Consumer Confidence Index declined to 121.5 in June, down from a downwardly revised prior month’s reading of 131.3. This was below the consensus estimate of analysts polled by Econoday for 132.

The Present Situation Index — which is based on consumers’ assessment of current business and labor market conditions — decreased to 162.6 from 170.7. The Expectations Index — which is based on consumers’ short-term outlook for income, business and labor market conditions — decreased to 94.1 from 105 last month.

“After three consecutive months of improvement, consumer confidence declined in June to its lowest level since September 2017,” Lynn Franco, senior director of economic indicators at the Conference Board, said. “The escalation in trade and tariff tensions earlier this month appears to have shaken consumers’ confidence. 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.”

“While one data point does not a trend make, this release could suggest that the consequences of the trade war are spilling over into the household sector,” Jon Hill, an interest-rate strategist at BMO Capital Markets, said.

“When both the expectations and current conditions move sharply in the same month, it often indicates a response to other external forces since these indices are usually driven by different forces,” said Ian Shepherdson, chief economist at Pantheon Macroeconomics.

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