How Sliding Confidence Could Pinch Your Wallet This Summer

Consumer sentiment dipped sharply in June as worries over tariffs, prices and job prospects weighed on Americans’ outlook—potentially prompting tighter budgets and postponed big-ticket purchases.

The Conference Board’s headline Consumer Confidence Index fell 5.4 points to 93.0 in June, reversing much of the previous month’s gains. Its Present Situation gauge—tracking views on today’s business and labor market health—slid 6.4 points to 129.1, while the Expectations component dropped 4.6 points to 69.0, remaining well below the 80-point warning light for an impending recession.

Consumer assessments of current business conditions grew less favorable, and confidence in job availability ticked down for a sixth straight month, although both measures still signal a broadly solid labor market. Future-looking subindexes for business, employment and personal income all weakened, suggesting growing reluctance to undertake major financial commitments.

Trade tensions and high prices topped write-in concerns, though average 12-month inflation expectations edged down to 6.0% from 6.4% in May. Geopolitical issues and social unrest registered more often than in prior months but remained secondary to worries about tariffs and the cost of living.

Plans to buy cars held near a seven-month high, yet home-buying intentions slipped and more consumers sat on the fence about appliances and electronics purchases. Demand for most services softened, even as dining out, motor vehicle servicing, museum visits and fitness activities saw slight upticks. Overall travel intentions were flat—interest in overseas trips rose as domestic travel flagged.

Elevated recession fears persisted, with a majority still bracing for an economic downturn within a year. Given rising interest-rate expectations and less bullish views on wages, households may curb spending further and delay non-essential expenditures until uncertainty abates.

Article by multiple contributors, based upon information from The Conference Board Consumer Confidence Survey®

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