In June, the US consumer confidence index showed a slight decline to 100.4 from 101.3 in May, according to new data from The Conference Board. This was in line with economists’ expectations and reflects concerns about the future, despite Americans remaining optimistic about the strength of the labor market. Chief Economist Dana Peterson noted that any significant weakness in the labor market could further weigh on consumer sentiment, as this index is closely watched and drives nearly 70% of US economic activity.
The Conference Board’s Consumer Confidence Index and the University of Michigan’s Consumer Sentiment Index are both key indicators of how Americans view the current and future strength of the economy, although they tend to show slightly different trends. While the former puts more emphasis on employment and labor market conditions, the latter focuses more on household finances and inflation concerns.
In fact, a preliminary reading of the University of Michigan index for June already showed sentiment at a seven-month low, indicating continued concerns among US consumers. As such, it will be important to monitor how consumer confidence may change in response to any changes in the labor market or broader economic conditions throughout the year.