U.S. consumer confidence edged up in June, driven by lower gasoline prices. However, households' perceptions of the labor market deteriorated, with more consumers viewing jobs as hard to get, reaching a near 5-1/2 year high.
The mixed signals from consumer confidence, with a slight rise in overall sentiment but a notable worsening in labor market perceptions, indicate underlying economic uncertainties that could influence future consumer spending and Federal Reserve policy decisions.
U.S. consumer confidence saw a modest increase in June, according to a survey by The Conference Board. The index rose to 91.2, up from a revised 90.6 in May, surpassing economists' expectations of 94.7. This uptick was partly attributed to a decline in gasoline prices, which dipped below $4 a gallon in mid-June for the first time since late February.
However, the survey also revealed a deterioration in how households perceive the labor market. The percentage of consumers reporting that jobs are 'hard to get' increased to 22.5%, the highest level seen since January 2021. Economists had anticipated a stronger rise in the overall confidence index.
Dana Peterson, chief economist at The Conference Board, noted that while appraisals of current business conditions were slightly more positive, perceptions of the labor market softened significantly. Consumers anticipate little improvement in the labor market over the next six months.
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