From Optimism to Caution: U.S. Consumer Confidence Unexpectedly Drops

TradingKey – Data released on Tuesday by the Conference Board showed that the U.S. consumer confidence index fell to 93 in June , a decline of 5.4 points from May , and below market expectations. This drop interrupted the brief rebound seen earlier amid hopes of easing trade tensions.

【U.S. Consumer Confidence Slips Again in June, Reversing May’s Gains | Source: Bloomberg】

Within the index breakdown:

• The Present Situation Index , which reflects consumers’ assessment of current business and employment conditions, dropped 6.4 points to 129.1 .
• The Expectations Index , which measures outlook for income, business conditions, and job market over the next six months, also declined — falling 4.6 points to 69 , well below the 80 threshold , which historically signals rising recession risks.

Typically, an Expectations Index below 80 indicates growing concerns about economic weakness — a warning sign that households are becoming more cautious about future spending.

One of the main drivers behind the drop in sentiment is uncertainty around the Trump administration's tariff policies . Although overall inflation has remained moderate over the past three months, prices for goods directly affected by tariffs — especially electronics — have already started to rise. Fed Chair Jerome Powell noted last week that these price changes are beginning to show up in broader inflation readings.

With increasing expectations of higher import tariffs, some households are starting to feel pressure from rising prices. These shifts are already influencing consumption patterns. Surveys indicate that consumers are delaying purchases of electronics and homes.

“Rising price uncertainty makes it harder for families to plan everyday spending,” said Elizabeth Renter , Senior Economist at NerdWallet . “This often leads to a more cautious approach to discretionary spending.”

Although mentions of geopolitical and social unrest increased slightly during the June survey period, they did not dominate respondents’ concerns. Instead, most consumers focused on inflation trends, income expectations , and trade policy developments when forming their views.

If tariff-driven cost increases continue to flow into consumer prices — combined with a cooling labor market — household spending momentum may further weaken, posing a headwind to economic growth in the second half of the year.