US consumer confidence weakens on job market worries

U.S. consumer confidence unexpectedly deteriorated in June as households increasingly worried about job availability, another indication that labor market conditions were softening against the backdrop of rising economic uncertainty because of the Trump administration's tariffs.

The ebb in confidence reported by the Conference Board on Tuesday was across all age cohorts and nearly all income groups. It was also across the political spectrum, with the largest decline among Republicans.

Consumers remained pre-occupied with the import duties and were mostly undecided on big-ticket purchases. There was a decline in the share expecting their incomes to increase, though perceptions of the current financial situation remained solid.

The share of consumers viewing jobs as plentiful was the smallest since March 2021, aligning with the continued elevation in the number of people collecting unemployment checks as well as a moderation in job growth.

"Worry over prices in tandem with a diminished share of consumers who expect their household incomes to increase over the next six months points to still-elevated household financial anxieties," said Tim Quinlan, a senior economist at Wells Fargo.

"Our forecast still calls for a stall in spending in the second half of this year. We have been making the case that what looks like resilience in retail spending in recent months may in fact be an indication of pulled-forward demand ahead of the full price impact of tariffs and that those outlays are apt to be curtailed in coming months.”

The Conference Board's consumer confidence index dropped 5.4 points to 93.0 this month, erasing nearly half of the sharp gain in May. Economists polled by Reuters had forecast the index increasing to 100.0.

The cutoff date for the survey was June 18, before the U.S. joined in the fray between Israel and Iran, by bombing Tehran's nuclear facilities. Trump on Monday announced a ceasefire. The survey noted that "references to geopolitics and social unrest increased slightly from previous months but remained much lower on the list of topics affecting consumers' views.”