Consumer Confidence Edges Higher as Economic Signals Remain Mixed

New data released yesterday showed The Conference Board's Consumer Confidence Index rose 0.6 points to 91.2 in June, up from a downwardly revised 90.6 in May. Consumers are feeling better about the outlook, a bit more optimistic about making major purchases and not as strongly about the labor market today.

The Present Situation Index, which measures how consumers feel about business and labor conditions right now, fell 3 points to 116.4. The Expectations Index, which captures the six-month outlook for income, business, and jobs, rose 3 points to 74.4.

Sentiment on the present situation weakened because labor-market perceptions deteriorated. Views of current business conditions improved slightly, but was more than offset by a softer read on jobs. The share of consumers saying jobs are "hard to get" climbed to 22.5%, the highest level since January 2021. The labor market differential, the gap between those who say jobs are plentiful and those who say jobs are hard to get, narrowed to just +2.4 percentage points. Households are seeing weaker job availability and a less favorable labor-market backdrop.

Declining oil prices are helping reduce inflation fears and lift confidence. Despite rising job uncertainty, consumers are feeling better about making large purchases. Plans to buy big-ticket items improved, with consumers shifting from "no" to "maybe," alongside a modest pickup in the share saying "yes." Auto buying plans kept rising on a six-month moving-average basis. Homebuying expectations rose on a six-month rolling basis. These are the most rate-sensitive, most confidence-sensitive purchases a household makes, and they firmed in a month when consumers said they felt worse about current labor-market conditions.

Plans to spend more on services over the next six months also shifted from "no" to "maybe," with restaurants, streaming, and personal care leading the list. Yet consumers' view of their family's current financial situation deteriorated for a third straight month, even as their view of their future financial situation brightened back to where it sat at the start of the year.

The June report leaves a mixed message. Lower energy prices and slightly brighter expectations are helping keep confidence from weakening further, while the labor market and current household finances are leaving consumers more caution. That combination points to a consumer who may still spend, but with less conviction. And with confidence readings now less tightly linked to actual spending, the hard data on jobs, income, and retail activity will matter more than the mood survey alone.

In related news, recent Chicago Fed research finds the relationship between traditional sentiment measures and annual real consumer spending growth has weakened sharply since 2020. Even the Conference Board index is now far less correlated with real spending growth than at any point in the past 40 years. Confidence still tells us something about mood, but it is telling us less than it once did about what consumers will actually do.

NMMA will continue tracking consumer sentiment and its impact on the industry. Members are encouraged to leverage tools such as the Monthly Industry Data Summary and Marine Leadership Barometer to support planning and navigate evolving market dynamics. For more economic updates and data-driven insights, visit nmma.org/statistics or contact the NMMA Business Intelligence team at [email protected].

This analysis was prepared by NMMA and Dr. Shawn DuBravac on behalf of NMMA.