American consumers’ expectations for the future of the economy have hit their lowest point in almost 10 years, according to a new consumer confidence report.
The Conference Board, a business research organization, released its U.S. Consumer Confidence report Tuesday, surveying American consumers on the state of the economy. The group’s Expectations Index, which is “based on consumers’ short-term outlook for income, business, and labor market conditions,” is at its lowest point in nearly ten years.
Of those surveyed, 29.5% expected business conditions to worsen while just 14.7% expected them to improve within the next six months, according to the Conference Board. Consumers were slightly more skeptical of the labor market as well, with 51.3% of consumers in June saying jobs were plentiful, down from 51.9% in May, while 11.6% of consumers said jobs were “hard to get,” down from 12.4%.
#ConsumerConfidence declined 4.5 pt in June to 98.7 (1985=100)—its lowest level since Feb 2021. . #Expectations Index—based on consumers’ short-term outlook for income, business, and labor market—fell sharply by 7.3 pts to its lowest since March 2013. https://t.co/gWOsauyktz pic.twitter.com/HbC5t6x4tT
— The Conference Board (@Conferenceboard) June 28, 2022
“Consumer confidence fell for a second consecutive month in June,” said Lynn Franco, senior director of economic indicators at the Conference Board. “While the Present Situation Index was relatively unchanged, the Expectations Index continued its recent downward trajectory—falling to its lowest point in nearly a decade. Consumers’ grimmer outlook was driven by increasing concerns about inflation, in particular rising gas and food prices. Expectations have now fallen well below a reading of 80, suggesting weaker growth in the second half of 2022 as well as growing risk of recession by yearend.”
Consumers likely predict that, thanks to skyrocketing inflation, the Federal Reserve will increase interest rates and make borrowing money more expensive, according to the Wall Street Journal. As a result, purchases for big-ticket items like homes, cars and appliances will decline, spelling trouble for the greater economy, Bloomberg reported. (RELATED: INFLATION FIREWORKS: 4th of July BBQs Just Got A Lot More Expensive)
The Conference Board did not immediately respond to TheDCNF’s request for comment.
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