US consumers' perceptions of economic conditions improved in June, driven by Middle East ceasefire negotiations and the resulting drop in oil prices. However, the improvement in consumer sentiment fell short of Wall Street's expectations, while perceptions of the job market were the worst in five years.
The Conference Board, a US economic research organization, said Monday that the June consumer confidence index came in at 91.2, up 0.6 point from May's 90.6. The figure was far below the 94.6 expected by analysts surveyed by Dow Jones. In detail, the Present Situation Index, which reflects current business and labor market conditions, fell to 116.4 from 119.4, while the Expectations Index, reflecting short-term future outlook, rose to 74.4 from 71.4. Although the Expectations Index edged up, it remained below the 80 threshold, a level that signals entry into a recession.
The survey stood out in particular for the 22.5% of respondents in the Present Situation Index survey who answered that "jobs are hard to get." This was the highest level in five years and five months since January 2021 (22.8%). The result also contrasts with other indicators that suggest the recent strength of the US labor market, including the nonfarm payrolls report. In the May Job Openings and Labor Turnover Survey (JOLTS) released by the US Labor Department the same day, job openings on a seasonally adjusted basis stood at 7.594 million, exceeding the market forecast of 7.3 million.
The June consumer confidence index was based on survey results collected from June 1 to 23. It reflected the signing of a ceasefire memorandum of understanding (MOU) between the United States and Iran and the recent drop in international oil prices. Dana Peterson, chief economist at the Conference Board, said, "Consumers' assessments of the economic situation improved slightly from a month earlier," while adding, "Perceptions of labor market conditions have weakened noticeably."
