Americans have been feeling somewhat gloomy about the economy this year, due in large part to fears of job loss and inflation resulting from President Trump’s still-developing trade war. Consumer confidence started sliding in January, and after a brief jump higher in May, the downward slide continued in June, according to data released Tuesday.
The Conference Board’s consumer confidence index fell 5.4 points in June, disappointing expectations. The decline was seen in all age and income groups, and across political parties.
“Consumer confidence weakened in June, erasing almost half of May’s sharp gains,” said Stephanie Guichard, a senior economist at The Conference Board. “Tariffs remained on top of consumers’ minds and were frequently associated with concerns about their negative impacts on the economy and prices.”
Tariffs have fluctuated as Trump announced new ones and then suspended some of them. According to an analysis by the Yale Budget Lab, the effective tariff rate has fallen from a peak of more than 25%, but still registers nearly 15%, the highest since the 1930s.
Heather Long, chief economist at Navy Federal Credit Union, said in a note that in an uncertain environment, consumers are waiting to see how things play out. “They are sitting on the sidelines and only buying homes, cars and appliances if they absolutely must,” she said. “This is an ‘abundance of caution economy.’”