Economist's Insights

Consumer Confidence Cooled on Less Optimism about the Future

Jun 26, 2018

Consumer confidence cooled unexpectedly in June according to the Conference Board’s latest release but remained near its strongest levels of the cycle. The headline index dropped from 128.8 (revised up from 128.0) to 126.4 (expected 128.0) in response to some softening of future expectations.

The present assessment was essentially flat near its highest level since 2001 but the expectations index dipped to just below its 18-month average. Since surging after the November 2016 election, the expectations index has essentially moved sideways within its best range of the cycle. Moderation in the outlook was caused in part because consumers expected some worsening of business conditions but also because fewer believed they might receive a bump in their pay. The difference between those expecting higher incomes and those expecting lower incomes narrowed for a third month to its lowest level since January 2017. That may help explain why fewer said they planned to buy a new car (lowest since October 2015) or major appliance (second lowest since February 2016).