Consumer confidence ticks up as gas prices fall but Americans remain gloomy about the economy
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WASHINGTON (AP) — Americans’ attitudes toward the economy improved slightly this month as gas prices declined, but their outlook is still mostly negative by historical standards.
The Conference Board said Tuesday that its consumer confidence index rose 0.6 point to 91.2 in June, a figure that is still below its year-ago reading of 95.2. Consumer attitudes worsened after the Iran war caused oil and gas prices to spike, accelerating inflation and causing Americans’ inflation-adjusted incomes to decline. Before the pandemic, the index regularly topped 120.
The report suggests that consumer confidence is recovering only slowly from the hit caused by the Iran war. Even so, Americans have continued to spend despite their dour outlook, which has kept the economy growing even as inflation accelerated. Measures of consumer sentiment have been less predictive of how Americans actually shop since 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% 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% from 19.8% 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%, according to data provider FactSet.