U.S. consumer confidence rises, but labor market worries deepen

Consumer confidence edged higher in June, but the bigger story was the worsening view of the job market. The Conference Board’s confidence index rose to 91.2 from a downwardly revised 90.6 in May, yet the share of consumers saying jobs were hard to get climbed to 22.5 percent, the highest reading since January 2021.

The June survey ran from June 1 through June 23 and showed a split picture beneath the surface. The Present Situation Index fell 3.0 points to 116.4, while the Expectations Index rose 3.0 points to 74.4. That meant households felt slightly better about what lay ahead even as their assessment of current labor-market conditions softened further.

The decline in gasoline prices helped ease inflation anxiety during the month, and the Conference Board said falling oil prices in recent weeks provided some relief to consumer fears about prices. The survey period also included the extension of the U.S.-Iran ceasefire, a reminder of how closely consumer sentiment has tracked energy costs and Middle East tensions this year. But cheaper fuel did not erase the strain in job perceptions, and the Conference Board said consumers expected little change in the labor market six months from now even as their views of business conditions and incomes improved.

That disconnect matters because consumer spending remains the backbone of the U.S. economy. A modest lift in confidence driven by lower gas prices can fade quickly if households grow more cautious about layoffs, hiring and wage growth. Bigger purchases, borrowing plans and day-to-day spending all depend on a labor market that feels stable enough to support them.

The broader policy backdrop remains unhelpful. In its June outlook for the U.S. economy, The Conference Board continued to forecast higher inflation and slower growth, warning that higher prices would divert limited household resources toward energy and other affected goods and services, weighing on real consumer spending. The consumer confidence survey is conducted monthly online by Toluna and is broken out by age, income, nine regions and the top eight states. The Conference Board took over the widely watched index from the U.S. government in 1995, and June’s reading showed how quickly a small lift in mood can be overshadowed by labor-market anxiety.