Americans’ confidence in the U.S. economy fell notably in June, reversing a brief improvement in May. According to the Conference Board, the consumer confidence index dropped to 93, a significant fall from 98.4 last month. This unexpected downturn came as a surprise to economists who had anticipated a slight increase. The index is now approaching levels not seen since the early days of the COVID-19 pandemic, signaling a broader unease among consumers.
Short-Term Expectations Drop Sharply Amid Trade Policy Fears and Growing Recession Concerns
A key measure of short-term expectations regarding income, business conditions, and job prospects declined by 4.6 points to 69—well below the recession-warning threshold of 80. This drop suggests that more Americans are bracing for economic difficulties ahead. The Conference Board also reported that consumers’ assessments of the current economy slid by 6.4 points to 129.1, indicating growing pessimism about present conditions.
U.S. Consumer Confidence Sinks in June as Recession Fears and Trade Worries RiseConsumer anxiety appears strongly linked to President Donald Trump’s aggressive trade policies, particularly tariffs, which many respondents believe will harm their personal finances. These concerns have contributed to a clouded economic outlook and heightened fears of a potential recession. The unpredictability of Trump’s approach to trade and global economic relations has made it more difficult for consumers to feel secure about the economy’s future direction.
Labor Market Remains Strong, but Inflation and Global Tensions Weigh on Consumer Sentiment
Despite declining confidence, the U.S. labor market continues to show signs of resilience. The Labor Department reported that 139,000 jobs were added in May, even as hiring slowed amid tariff uncertainty. Unemployment remains low at 4.2%, and although job market perceptions have weakened for six consecutive months, they are still in positive territory. However, this trend suggests increasing caution among consumers regarding future employment prospects.
Inflation, while slightly easing, remains a significant concern for consumers. Prices rose in May, with core inflation holding steady at 2.8% for the third consecutive month. Many survey respondents mentioned the impact of rising prices in conjunction with tariffs. Meanwhile, worries about geopolitics and social unrest have slightly increased but remain less urgent in consumers’ minds. Notably, the survey closed before the U.S. targeted Iranian nuclear facilities, though it did follow Israel’s bombing of Tehran.
