US Consumer Confidence Index Dips Significantly in June 2025

Decline in US Consumer Confidence in June 2025

In June 2025, the Conference Board's Consumer Confidence Index® experienced a notable decrease, falling by 5.4 points to reach 93.0, compared to 98.4 in May. This decline highlights growing concerns among consumers regarding economic conditions and labor market prospects.

Current Situation Index

The Present Situation Index, which reflects consumers' assessments of the current business and labor market, also showed deterioration. It dropped by 6.4 points to 129.1. The decline in consumer confidence is significant, as it nearly erases half of the gains achieved in the prior month.

Stephanie Guichard, Senior Economist at the Conference Board, commented, "Consumer confidence weakened in June, predominantly due to pessimistic assessments about current business conditions and future expectations."

Consumers’ outlook for the labor market weakened for the sixth consecutive month, even though it remained in positive territory, reflective of a still solid employment environment. The Expectations Index, which measures consumers' short-term outlook on income, business, and labor market conditions, declined by 4.6 points to 69.0, markedly below the 80 threshold that often indicates a looming recession.

Surveys and Responses

The survey results indicated that consumers' concerns were widespread, affecting various age groups, income levels, and political affiliations, with Republicans showing the largest decrease in confidence. Many respondents continued to express worries about tariffs and their detrimental effects on the economy, alongside ongoing inflationary pressures.

Interestingly, there was a slight increase in mentions of easing inflation compared to the previous months. The average inflation expectation for the next 12 months decreased to 6.0%, down from 6.4% in May and 7% in April.

Stock Market Outlook

The outlook for stock prices showed signs of recovery, as 45.6% of consumers anticipated an increase over the next year, a rise from 37.6% two months prior. Conversely, a significant majority (57%) expected interest rates to climb, the highest percentage noted since October 2023.

Despite a minor decline, consumers maintained solid assessments of their current financial situations. However, their expectations for future financial conditions improved, reaching the highest point in four months. Notably, the share of consumers anticipating a recession within the coming year increased slightly, remaining above the previous year’s levels.

Consumer Spending and Confidence

When it comes to big-ticket purchases, plans for buying vehicles remained stable, reaching the highest rate since December 2024, while home purchase plans experienced a decline. In terms of purchasing intentions, consumers appeared more indecisive regarding various major items, though there was a slight uptick in appliance buying intentions versus electronics.

Spending intentions shifted slightly as well, particularly towards services. Dining out remained a top priority for many consumers, along with interests in visiting motor vehicle services, museums, and fitness activities. Travelers displayed a trend of planning trips abroad while domestic travel intentions saw a decline.

Conclusion

The consumer confidence drop in June 2025 illustrates heightened apprehensions regarding the economic backdrop, with significant implications for business sectors reliant on consumer spending. As noted by Guichard, the economic landscape remains fragile and closely watched by both consumers and policymakers alike. In an evolving financial environment, consumers are adjusting their outlook and spending plans as they navigate the uncertainties ahead, a profound change from just months earlier.

The Conference Board will continue to monitor these trends, providing monthly insights through the Consumer Confidence Index, reflecting real-time sentiments from across the consumer base.