In an unexpected turn, consumer confidence in the US declined in June amid rising concerns about job availability and economic uncertainty surrounding Trump's tariff policies. According to the Conference Board’s consumer confidence index, the confidence level dropped to 93.0 by 5.4 points this month, retracting nearly half the rebounds made in May and missing economists’ expectations of a rise to 100.0.
The June decline reflects the turbulent year for American consumer sentiment, shared by almost all income groups and all age groups and political affiliations, with the steepest fall observed among Republicans. Consumer confidence fell sharply in February as Americans wrestled with stubborn inflation and the impending tariff implementations, with a report from the Conference Board showing the sharpest one-month drop in confidence since August 2021.
Consumer plans to buy cars stayed at their peak since December 2024, but housing purchase intentions fell. Overall, the declining confidence stems largely from import tariff anxieties, as households grow hesitant about major expenditures. Economists point to a potential paradox: the recent surge in retail sales may not indicate genuine economic strength but rather a demand acceleration, with consumers making purchases now to avoid steeper costs once tariffs push prices higher.
Conference Board data revealed that all three components of the expectations index deteriorated: business conditions, job prospects, and future income prospects all declined. Consumer expectations for income, business, and job market conditions drove the Expectations Index down 4.6 points to 69.0, falling significantly below the recession-warning level of 80. Data collection for preliminary results ended June 18, 2025.
Only 15.4% of consumers expected more jobs to be available, down from 18.6% in May, while 25.9% anticipated fewer jobs - a slight improvement from 26.2%. Views on current job conditions also cooled: 29.2% of consumers said jobs were “plentiful,” down from 31.1% the previous month, and 18.1% said jobs were “hard to get,” a marginal decline from 18.4%. These shifts suggest weakening confidence in employment prospects, which is being reinforced by business hiring patterns. Upcoming employment data will be key in determining whether this trend continues or stabilises.
Adding to the uncertainty, businesses are slowing down recruitment, leading to a tightening labor market that could push unemployment higher. "Given the concurrent rise in continuing jobless claims, it looks increasingly likely that the unemployment rate will rise to 4.3% in next week's employment report," said Abiel Reinhart, an economist at JPMorgan on June 25, 2025.
Chelsea covers business and economic news in Malaysia, providing insights on market trends, corporate developments, and financial policies. More about Chelsea Low.
