US Consumer Confidence Worsens Again in June Amid Lingering Inflation and Recession Fears

US consumer confidence fell again in June amid uncertainty from Trump's trade policies, reversing the improvement seen in May.

Data released by the Conference Board on Tuesday showed that the US consumer confidence index dropped to 93 in June, below all economists' expectations and down 5.4 points from May. This pullback in confidence underscored ongoing concerns about the potential economic impact of the US's increased import tariffs.

The report also indicated that the index measuring short-term expectations of US consumers regarding income, business, and the job market fell 3.8 points to 69, and an index below 80 typically signals an impending recession.

Last month, amid a slight easing of trade tensions, the consumer confidence index rebounded sharply from a near five-year low, ending a streak of declines. However, as uncertainty over Trump's economic policies continued to rise and tensions in the Middle East escalated, consumers' optimism about the US economic outlook weakened.

The survey's cutoff date was June 18, just days before the US bombing of Iranian nuclear facilities. Stephanie Guichard, senior economist for global indicators at the Conference Board, said, "Compared to previous months, there was a slight increase in mentions of geopolitical and social unrest, but it still ranked low on the list of topics influencing consumers' views."

Guichard added that tariffs were a more significant concern for consumers, as they were often linked to fears of negative impacts on the economy and prices.

Despite mild inflation over the past three months, some consumers began to plan their spending more cautiously. Guichard noted that consumers were more pessimistic about current business conditions than in May. Their views on current job opportunities weakened for the sixth consecutive month, though they remained in positive territory, in line with the still-strong job market.

Elizabeth Renter, senior economist at NerdWallet, commented, "As we wait for the full impact of tariffs on prices to materialize, this uncertain sentiment may lead consumers to cut back on spending. After all, it's hard to budget for grocery bills in the coming months if you're unsure how big they'll be."

So far, the impact of tariff increases has not been reflected in overall inflation data. However, Fed Chairman Powell pointed out at a press conference last week that individual items, such as electronics, had become more expensive.

The survey showed that consumers were postponing purchases of electronics and homes, but spending on other big-ticket items like cars and home appliances remained robust.

Additionally, the proportion of consumers expecting an economic recession in the next 12 months has slightly increased. Heather Long, a corporate economist at the Federal Navy Credit Union, said, "In this environment, it's not surprising that consumers are reluctant to make big purchases. They are waiting and watching, and will only buy homes, cars, and home appliances when absolutely necessary."