Americans’ economic outlook saw a modest uptick this month, primarily driven by a dip in gas prices, though overall sentiment remains largely pessimistic compared to historical benchmarks.
The Conference Board reported on Tuesday that its consumer confidence index edged up by 0.6 points, reaching 91.2 in June. This figure, however, still lags behind the 95.2 recorded a year ago.
Consumer attitudes had significantly deteriorated following the Iran war, which triggered a surge in oil and gas costs, fueling inflation and eroding Americans’ real incomes. Before the pandemic, the index routinely surpassed 120.
The report suggests a sluggish rebound in consumer confidence from the severe blow dealt by the Iran conflict. Despite this gloomy perspective, Americans have continued their spending habits, a trend that has sustained economic growth even as inflation intensified. Notably, consumer sentiment metrics have proven less reliable in predicting actual purchasing behavior since the onset of the pandemic.
“Consumer confidence inched up in June as falling oil prices in recent weeks provided some relief to consumer inflation fears,” Dana Peterson, the Conference Board’s chief economists 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.”
Earlier this month, a government report showed that consumers stepped up their spending in May despite higher gas prices. Analysts expect the steady consumer outlays kept the economy growing at about a 2.5 percent annual rate in the April-June quarter.
Falling gas prices may also help boost Americans’ outlook in the coming months. On average nationwide, gas prices spiked above $4.50 after the U.S.-Iran conflict began Feb. 28. They have since fallen back to $3.85 a gallon, according to AAA.
The survey also found that consumers had a dimmer view of hiring and the job market this month. The proportion of Americans who said jobs are “hard to get” rose to 22.5 percent from 19.8 percent the previous month, a noticeable increase.
But on Wednesday, the government released a report showing that the number of open jobs remained at a solid 7.6 million in May, indicating that companies are showing more interest in recruiting workers.
The Labor Department will release its monthly jobs report for June on Thursday, and economists forecast it will show that employers added 100,000 jobs, a solid gain. The unemployment rate is expected to stay at a low 4.3 percent, according to data provider FactSet.
