Consumers Temper Spending Plans as Confidence Slides in June

The most recent inflation data indicate that the impact of tariffs overall has been thus far not been as drastic as some might have feared. But consumers are still mulling what’s to come, and the spending picture is at best mixed.

On Tuesday (June 24), The Conference Board released its latest report on consumer confidence, which slid after a bounce in May.

At a high level, the overall Index dropped to 93, down from 98.4 in the previous month.

The look ahead, in terms of forward looking expectations, showed a 69 reading, down from 73.6 in May. Future business conditions also waned, as 16.7% of consumers said they expect business conditions to improve in six months. That’s lower than the 19.9% in May.

The Conference Board has said that the 69 tally of future expectations was “substantially below the threshold of 80 that typically signals a recession ahead.”

Cutting May’s Gains

In a statement that accompanied the release, Stephanie Guichard, Senior Economist, Global Indicators at The Conference Board, said that “consumer confidence weakened in June, erasing almost half of May’s sharp gains,” adding that “June’s retreat in confidence was shared by all age groups and almost all income groups.” Tariffs, inflation and high prices were all top of mind for consumers.

Although inflation is expected to decelerate — where the 12 month expectations stood at 6%, down from 6.4% in May and 7% in April — those rates would still be markedly high, we note.

“Regarding interest rates, 57% expected rates to rise, the highest share since October 2023,” said Guichard.

The mixed messages for spending came across through data that showed that purchasing plans for cars were steady at the highest level since December 2024, while purchasing plans for homes declined.

“Compared to May, more consumers were undecided about plans to buy big-ticket items overall. Buying plans for most appliances were slightly up while plans to buy electronics goods were down. Consumers’ intentions to purchase more services in the months ahead weakened compared to May, with almost all services categories declining,” The Conference Board said. There may be a silver lining, at least for restaurants, as dining out remained one of the key categories where households still intend to spend.

But the labor picture is a bit darker. The Board’s data indicated that 29.2% of consumers said jobs were “plentiful,” down from 31.1% in May. Looking ahead, 15.4% of consumers expected more jobs to be available, down from 18.6% in May.

June’s Conference Board report muddies a murky picture for retailers into the summer months. Though confidence gained ground in May, it did not translate into a groundswell at the cash register. As PYMNTS reported earlier this month, in May, retail sales slipped 0.9%, adding to a revised 0.1% decline in April.

Some discretionary spending categories declined as well, though others showed gains. Electronics and appliance store sales fell by 0.6% in May, with total sales of $7.6 billion, representing a 1.9% year-over-year decrease. Health and personal care retail sales were 0.1% lower. Notably, spending at restaurants and bars was 0.9% lower, reversing positive trends seen in the previous two months, so the spending intentions noted above when it comes to dining out would be welcome news for bars and restaurants.