The Conference Board’s Consumer Confidence Index® took a noticeable dip in June, dropping by 5.4 points to land at 93.0, down from 98.4 in May. This shift is more than just a number, it reflects growing unease among consumers about both current conditions and what lies ahead for the economy. The index, which uses 1985 as its baseline of 100, is watched closely by businesses, investors, and policymakers for clues about where the economy might be headed.
The Consumer Confidence Index is actually made up of two key components: the Present Situation Index and the Expectations Index. The Present Situation Index, which measures how consumers feel about current business and labor market conditions, slid 6.4 points to 129.1 in June. This suggests that people are seeing fewer positives in their day-to-day economic experience compared to last month.
Meanwhile, the Expectations Index, which tracks consumer outlook for income, business, and labor conditions over the next six months, fell 4.6 points to 69.0. This is a particularly important figure. Historically, when the Expectations Index drops below 80, it has often signaled a recession on the horizon. At 69.0, the index is now well under that threshold, pointing to a growing sense of caution about the future.
Several factors could be contributing to this downturn in sentiment. Persistent inflation, uncertainty about interest rates, and ongoing geopolitical tensions continue to weigh on consumers’ minds. While the job market has remained relatively resilient, concerns about future layoffs or slower wage growth may also be playing a role.
The cutoff date for the preliminary results was June 18, 2025, so the data captures consumer sentiment up to that point. Any developments since then, such as changes in gas prices or new economic reports are not reflected in these numbers.
Consumer confidence isn’t just an abstract concept. When people feel less optimistic about the economy, they tend to pull back on spending. This can have a direct impact on businesses, especially those in retail, travel, and other sectors that rely on discretionary spending. Lower consumer confidence can also influence the stock market, as investors react to signs that economic growth might be slowing.
It’s worth noting that consumer confidence can be volatile from month to month, and a single report doesn’t guarantee a recession is coming. However, the fact that the Expectations Index has dropped so far below the recession signal line should not be ignored. Businesses and investors will be watching closely to see if this is the start of a longer trend or just a temporary blip.
The next few months will be critical. If consumer sentiment continues to deteriorate, it could prompt the Federal Reserve and other policymakers to reconsider their approach to interest rates and economic support. On the other hand, if confidence stabilizes or rebounds, it could signal that consumers are adapting to current challenges and remain willing to spend.
The June drop in the Consumer Confidence Index is a clear sign that Americans are feeling more cautious about the economy. With the Expectations Index now well below the level that often signals trouble ahead, it’s a development that businesses, investors, and policymakers can’t afford to ignore. As always, the real test will be how these attitudes play out in actual spending and investment decisions over the coming months.
