US consumer confidence is at a 15-month low due to rising food & fuel prices

• US consumer confidence reached its lowest level in more than a year due to rising food and fuel prices.
• Discretionary expenditure is anticipated to decline in the coming months.
• Consumers were more negative about present business conditions and the labour market, but more concerned about the prospects for the next six months.

According to a Conference Board survey, the US consumer confidence reached its lowest level in more than a year due to rising food and gasoline prices.

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In June, the index of consumer confidence declined for the second consecutive month, falling 4.5 points to 98.7. This represents the lowest level since February 2021.

Inflationary pressures have dimmed the perspective of consumers for both the now and the future, and discretionary expenditure is anticipated to decline in the coming months.

Lynn Franco, a senior director at the Conference Board, stated of one of the survey’s sub-indices, “The Expectations Index resumed its recent downward track, falling to its lowest level in nearly a decade.”

Franco stated that Americans’ intentions to purchase homes and automobiles “have cooled since the beginning of the year, and this trend is likely to continue as the Fed rapidly raises interest rates to combat inflation,” as well as their vacation plans. The US housing market had a price decline in April, as increased mortgage rates discouraged purchasers.

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Compared to May, consumers were slightly more negative about present business conditions and the labour market, but more concerned about the economic prospects for the next six months. Twenty-two percent of respondents projected fewer jobs, up from 19.5 percent, while the percentage of respondents anticipating deteriorating business conditions rose by 3.1 percentage points to 29.5 percent.

The University of Michigan’s independent index of consumer sentiment sank to 50 in June, the lowest level in the survey’s history. This poll is often perceived as focusing more on the dynamics of the cost of living, making it more subject to rising inflation, whereas the Conference Board survey is typically viewed as focusing more on the labour market condition.