A confusing economy means a less confident consumer

The latest Consumer Confidence Survey from the Conference Board shows Americans feeling slightly better about the economy in June compared to May — but the improvement is shallow and uneven. People are less hopeful about the job market, yet more optimistic about inflation. They are also less sunny about their family finances. The result is a portrait of a consumer sending mixed signals because they are receiving mixed signals from the economy itself.

Economist Michael Green of Simplify Asset Management noted that the ceasefire in the Middle East likely eased consumers' short-term minds, but overall confidence remains lower than analysts would expect given the stable unemployment rate and inflation that, while elevated, is "kind of tenable." Yelena Schuletieva of the Conference Board put it plainly: "It's not that things are getting better. Things are getting less bad." Respondents mentioned the war less this month, but the level of prices remains very elevated. Sophia Beg of Morning Consult called the recent dip in gas prices "just a temporary relief," warning that if the job market weakens or inflation continues to rise, sentiment could fall again. Michael Green added that consumers' persistent belief that inflation and their personal finances will improve is "just another side effect of human nature. We gotta feel like things are getting better."