U.S. consumer confidence ticked up in June as falling gasoline prices provided relief, but labor market perceptions deteriorated to their weakest in more than five years.
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Consumer confidence rises to 91.2 in June as oil prices ease
U.S. consumer confidence edged up to 91.2 in June, missing expectations for 94.2, as moderating gasoline prices offset the worst labor market perceptions in more than five years.
"Consumer confidence inched up in June as falling oil prices in recent weeks provided some relief to consumer inflation fears," said Dana Peterson, chief economist at the Conference Board.
The Present Situation Index — measuring consumers' assessment of current business and labor market conditions — fell 3 points to 116.4. The Expectations Index, based on short-term outlook for income, business and labor market conditions, rose 3 points to 74.4. The share of consumers saying jobs are "hard to get" climbed to 22.5%, the highest since January 2021, while the labor market differential — the share saying jobs are "plentiful" minus those saying "hard to get" — narrowed 2.6 percentage points to 2.4%.
The mixed reading suggests the U.S.-Iran ceasefire and subsequent drop in gasoline prices below $4 a gallon are slowly rebuilding household confidence, even as the labor market shows cracks that could weigh on consumer spending in coming months. The survey period of June 1 to 23 encompassed the ceasefire extension, which helped push pump prices lower for the first time since the conflict began in late February.
The Conference Board's headline index remains well below the 100 threshold that historically signals healthy consumer sentiment, though it has recovered from the cycle low of 86.5 recorded in January. The last time the index traded near current levels was in late 2023, when inflation was cooling but consumers remained cautious about the economic outlook.
Consumers' write-in responses continued to skew pessimistic, with references to prices and inflation, oil and gas costs, and food and grocery prices remaining elevated. Mentions of tariffs and trade, politics, and the labor market also rose, the Conference Board said.
The labor market data will face a key test Thursday, when the Labor Department releases its June employment report. Economists polled by The Wall Street Journal expect the U.S. economy to add 115,000 jobs, which would mark a slowdown from the three-month average of roughly 170,000 through May. A print below 100,000 would intensify concerns that the softening labor market is becoming a structural headwind rather than a temporary normalization.
Spot gold rose to a session high of $4,047.71 an ounce after the data release, up 0.71% on the day, as the weaker-than-expected confidence reading reinforced expectations that the Federal Reserve may need to ease policy sooner than previously anticipated. The 10-year Treasury yield edged lower as traders weighed the implications of a cooling consumer against still-elevated inflation pressures.
This article is for informational purposes only and does not constitute investment advice.
[1] U.S. Consumer Sentiment Climbed in June, Conference Board Says - WSJ[2] Spot gold spikes to session high $4,048/oz after Consumer Confidence at 91.2 in June - KITCO[3] US consumer confidence edges up in June; labor market perceptions deteriorate - KITCO[4] US consumer confidence edges up in June; labor market perceptions deteriorate - Reuters[5] U.S. Consumer Sentiment Climbed in June, Conference Board Says
