WASHINGTON — Americans are feeling a little better about the economy this month, thanks in part to declining gas prices, but their overall mood remains historically low, according to a new report released Tuesday.
The Conference Board announced that its consumer confidence index climbed 0.6 point in June to reach 91.2 — an improvement, but still below the 95.2 reading recorded at the same time last year. The index took a hit after the Iran war sent oil and gas prices sharply higher, fueling inflation and cutting into Americans’ purchasing power when adjusted for rising prices. Prior to the COVID-19 pandemic, the index routinely came in above 120.
The data points to a slow and uneven recovery in consumer confidence following the economic disruption triggered by the Iran conflict. Despite their pessimistic outlook, Americans have kept opening their wallets, which has helped sustain economic growth even as inflation picked up speed. Analysts note that since the pandemic, measures of consumer sentiment have become less reliable predictors of actual spending behavior.
Dana Peterson, the Conference Board’s chief economist, offered this assessment: “Consumer confidence inched up in June as falling oil prices in recent weeks provided some relief to consumer inflation fears. Consumer appraisals of current business conditions were slightly more positive compared to last month. However, perceptions of the current labor market softened measurably.”
A government report released earlier this month showed that consumers actually increased their spending in May, even with gas prices elevated at the time. Analysts believe that consistent consumer spending likely kept the economy growing at roughly a 2.5% annual rate during the April through June quarter.
Continued declines at the gas pump could further lift Americans’ spirits in the months ahead. After the U.S.-Iran conflict broke out on February 28, the national average for a gallon of gas shot above $4.50. Since then, prices have retreated to $3.85 per gallon, according to AAA.
The Conference Board survey also revealed that Americans have grown more concerned about the job market. The share of respondents who described jobs as “hard to get” jumped from 19.8% last month to 22.5% in June — a significant shift in perception.
However, a separate government report released Wednesday offered a more encouraging picture, showing that the total number of available job openings held steady at a healthy 7.6 million in May, suggesting employers are still actively looking to hire.
The Labor Department is set to release its monthly jobs report for June on Thursday. Economists are forecasting that employers added 100,000 jobs during the month, which would be considered a solid result. The unemployment rate is projected to remain at 4.3%, according to data provider FactSet.
