Consumer Confidence Index Dips Amid Inflation Woes

Key Findings:

• Present Situation Index declined to 133.6 from 144.8 in April.
• 20.3% of consumers rated business conditions as good, down from 20.8%.
• 17.6% said business conditions were bad, unchanged from April.

Outlook:

Despite the current dip, the Present Situation Index remains elevated, indicating that consumers are generally optimistic about the current economic situation. However, concerns about inflation and rising interest rates may dampen consumer sentiment in the coming months.

Analysis:

The Conference Board's Present Situation Index, which measures consumers' assessment of current business and labor market conditions, fell from 144.8 in April to 133.6 in June. This decline is likely driven by concerns about rising inflation and interest rates.

The percentage of consumers who rated business conditions as good declined from 20.8% in April to 20.3% in June, while the percentage who said business conditions were bad remained unchanged at 17.6%. This suggests that consumers are still generally optimistic about the current economic situation, but are becoming increasingly concerned about the impact of inflation.

The decline in consumer confidence is consistent with other recent data showing that Americans are worried about the rising cost of living. A recent survey by the Federal Reserve Bank of New York found that 61% of Americans expect inflation to remain elevated or increase over the next year.

The Conference Board's Consumer Confidence Index is a leading indicator of future economic activity. A decline in consumer confidence can signal a slowdown in spending, which could have a negative impact on economic growth.

Implications:

The decline in consumer confidence is a reminder that the economy is not immune to the effects of inflation. As inflation continues to rise, consumers may become more cautious about spending, which could lead to a slowdown in economic growth.

Sources:

• The Conference Board Consumer Confidence Index
• Federal Reserve Bank of New York Household Debt and Credit Report