US June Consumer Confidence Index at 93, Worse Than Expected

Pessimistic Outlook for Economy, Labor Market, and Income Due to Tariff Concerns

Consumers' Main Worry Is Identified as Tariffs

In June, the US Consumer Confidence Index worsened more than expected as concerns grew over the outlook for the economy, labor market, and income due to tariff policies.

On the 24th (local time), The Conference Board announced that June's economic confidence index fell by 5.4 points to 93. This is significantly lower than the expected figure of 100, which was the consensus from major media surveys of economists.

The index measuring consumer expectations for the next six months also dropped by 4.6 points to 69, while the index assessing current conditions declined by 6.4 points to 129.1.

Almost half of May’s rebound in confidence disappeared due to the decline. This indicates lingering concerns about the potential impact of increased import tariffs on the economy. Even though inflation has eased over the past three months, US consumers have become more cautious in their spending.

Stephanie Guichard, Chief Economist at The Conference Board, said, "Consumers are less positive about current business conditions than in May."

The Conference Board’s survey closed on June 18, five days after Israel began attacking Iran, reflecting concerns about geopolitics. However, the top concern among survey participants was identified as tariffs.

The percentage of consumers who said jobs are plentiful dropped to 29.4%, the lowest in four years. Those who said jobs were hard to get decreased slightly. Economists often use the gap between these two indicators as a measure of the labor market. The gap shrank to 11.1%, the lowest since March 2021.

There was a slight decrease in the percentage of consumers who expect their income to increase in the next six months. On the other hand, expectations for personal finances remained generally robust, likely reflecting a rebound in the US stock market and its outlook.

Conditions for purchasing high-priced items such as household appliances and electronics were mixed. Car purchase plans remained at similar levels to May, but the number of respondents planning to buy homes decreased. US retail sales declined for two consecutive months in May, as consumers cut back on spending ahead of tariff implementation.

According to The Conference Board data, the percentage of consumers expecting higher interest rates next year increased to 57%, the highest since October 2023.

Since the Trump Administration launched a tariff strategy to improve the trade balance and bring manufacturing back to the US, American consumer confidence has declined significantly.

Contributed by Jeong-Ah Kim, guest reporter, kja@hankyung.com