Consumer Confidence Edges Higher In June As Gas Prices Retreat From Iran War Spike

The Conference Board said its confidence index rose slightly to 91.2, but Americans remain cautious as inflation-adjusted incomes, job-market perceptions and fuel costs continue weighing on households.

By yourNEWS Media Newsroom

Consumer confidence improved slightly in June as gasoline prices fell from recent highs, offering Americans some relief after months of inflation pressure tied to higher energy costs.

The Conference Board said Tuesday that its consumer confidence index rose 0.6 point to 91.2 in June. The reading remained below the 95.2 level recorded a year earlier and far under the pre-pandemic period, when the index often exceeded 120.

The modest increase suggests households are recovering slowly from the economic strain that followed the Iran war, which drove oil and gasoline prices sharply higher, accelerated inflation and reduced Americans’ inflation-adjusted incomes.

Gasoline prices have eased in recent weeks after a major spring surge. The national average price for a gallon of gasoline stood at $3.85 Tuesday, according to AAA.

Before the Iran war began Feb. 28, regular gasoline averaged $2.98 per gallon nationally. Prices later climbed to $4.56 on May 21, a rise of more than 50%, before falling back.

“Consumer confidence inched up in June as falling oil prices in recent weeks provided some relief to consumer inflation fears,” Dana Peterson, chief economist at the Conference Board, said in a statement.

“Consumer appraisals of current business conditions were slightly more positive compared to last month. However, perceptions of the current labor market softened measurably,” Peterson added.

The survey showed Americans remain concerned about employment conditions. The share of consumers who said jobs are “hard to get” increased to 22.5% in June from 19.8% the previous month.

That weaker view of the labor market contrasted with government data released Wednesday showing that job openings remained solid at 7.6 million in May, suggesting employers were still seeking workers.

The Labor Department is scheduled to release the June jobs report Thursday. Economists expect the report to show that employers added 100,000 jobs, while the unemployment rate is projected to remain low at 4.3%, according to FactSet.

Despite consumers’ historically weak outlook, Americans have continued spending. A government report earlier this month showed consumer spending increased in May even as gasoline prices remained elevated.

Analysts expect that steady household spending helped keep the economy growing at about a 2.5% annual rate during the April-June quarter.

Since the COVID-19 pandemic, consumer sentiment measures have become less reliable as predictors of actual spending behavior. Americans have often expressed pessimism in surveys while continuing to shop, travel and spend on services.

The June confidence report points to an economy still supported by consumer activity but burdened by high prices, lingering energy shocks and uncertainty about hiring conditions.

Further declines in gasoline prices could improve household sentiment in the coming months, but the index remains well below normal historical levels, showing that many Americans continue to view the economy cautiously.