What’s going on here?

A key measure of the American economy – consumer confidence index – declined to 121.5 in June (more than the expected decline to 131.1) after three consecutive months of increases as consumers saw the trade war with China as an increased risk.

What does that mean?

“The escalation in trade and tariff tensions earlier this month appears to have shaken consumers’ confidence,” Conference Board senior director Lynn Franco said. “Continued uncertainty could result in further volatility in the Index and, at some point, could even begin to diminish consumers’ confidence in the expansion.”

Overall, consumers were less optimistic about the near future. The number of Americans think business conditions will improve six months from now drops to 18.1%.

Expectations for the U.S. job market were also lower:

• the number of consumers expecting the economy to add jobs in the near-term decreased to 17.2% from 18.4%;
• while those expecting less jobs in the near-term increased to 13% from 14.8%.

Content source: Sheetz. M. (2019) Consumer confidence drops more than expected, reaching its lowest point in nearly two years. CNBC. Available from: https://www.cnbc.com/2019/06/25/us-consumer-confidence-june-2019.html [Accessed 4 July 2019]