Consumer Confidence Index Dips

Tariffs may now be denting consumer expectations based on the consumer confidence index which dipped 2.4 points in June to 126.4 to come in at the low end of expectations. The softening is centered in the expectations component which fell 4.0 points to 103.2 and where the sub-component for income expectations shows fewer optimists, 18.8 vs 21.4 percent in May, and more pessimists at 8.7 vs 8.0 percent.

But levels are still very strong in this report and the current condition index, which offers hints at near-term consumer activity, held nearly unchanged at 161.1. The consumers' assessment of the June labor market is mixed with those saying jobs are plentiful down 2.1 percentage points to 42.1 percent offset by those saying jobs are hard-to-get, declining 7 tenths to 14.9 percent.

The immediate implications of today's report are quite favorable, pointing to a solid month for consumer spending, but the longer-term outlook is perhaps beginning to erode. Other readings in today's report show no change for year-ahead inflation expectations at 4.9 percent (which is moderate for this reading) and another rise in stock market bulls, up 4 percentage points to a sizable 42.4 percent vs 23.5 percent for the bears.