Key facts
- US consumer confidence index rose to 91.2 in June, though still below historical standards.
- US employers added only 57,000 jobs in June, a sharp decrease from prior months.
- The unemployment rate fell to 4.2% in May, partly due to people leaving the workforce.
- Weekly jobless claims decreased to 215,000 for the week ending June 27.
- The average 30-year fixed mortgage rate dropped to 6.43%, the lowest since mid-May.
Consumers' outlook on the U.S. economy saw a slight improvement in June, driven by declining gas prices, though overall sentiment remains subdued compared to historical standards. The Conference Board's consumer confidence index rose to 91.2, a marginal increase from previous periods but still significantly below pre-pandemic levels.
This cautious optimism comes despite persistent inflation and the economic impact of the Iran war, which previously caused a spike in oil and gas prices. Consumer attitudes had worsened following these events, impacting real incomes.
In the labor market, U.S. employers significantly scaled back hiring in June, adding only 57,000 jobs, less than half the number from the previous month. This slowdown suggests companies are maintaining a cautious stance regarding the economy's health, with inflation at a three-year high and consumer confidence near post-pandemic lows.
The unemployment rate, however, declined to 4.2% in May, a figure partly influenced by individuals leaving the labor force. Weekly applications for unemployment benefits also saw a slight decrease, falling to 215,000 for the week ending June 27, indicating that layoffs remain at relatively healthy levels.
Additionally, the average rate for a 30-year fixed mortgage fell to 6.43% this week, marking its lowest point since mid-May and easing borrowing costs for potential homebuyers. This decline follows a period where mortgage rates had been hovering around 6.5% due to disruptions in crude oil flow impacting inflation and bond yields.