On Tuesday, the Conference Board released fresh data on consumer confidence. Consumers reported that they’re feeling a little better about the economy compared to last month, but they’re less sanguine about the job market. They’re more optimistic about where inflation is headed, but more pessimistic about their family finances.All of that is to say, consumers are sending lots of mixed signals. And that’s because they’re getting mixed signals from the economy. Since human nature puts more weight on the short term, let’s start with that: “The decline in gasoline prices is helping consumers,” said Michael Green, chief strategist at Simplify Asset Management. He said it’s not surprising that the ceasefire in the Middle East is easing consumers’ minds. The promise of a peace deal “is at least raising prospects that gasoline prices and other costs will be lower, that inflation will be modestly better.”That also made consumers more confident about where the economy is headed in the short term. But Green added overall confidence is still lower than analysts would expect, given the pretty stable unemployment rate and the elevated (but kinda tenable) inflation rate.That’s where the long-term sentiment comes in, according to economist Yelena Shulyatyeva at the Conference Board. “It's not that things are getting better. Things are getting less bad.”Respondents mention the war a lot less this month. But “inflation is still prominent in those writing responses, and that means that the level of prices is still very elevated for the consumer,” Shulyatyeva said — which also explains why consumers are less confident than last month about their family financial situation.Sofia Baig, an economist with Morning Consult, called the dip in gas prices just a temporary relief. “Whereas everything else in the economy is the bigger picture that could be driving the trend of sentiment going forward, and we are trending downwards,” she said. Baig called this month’s mini bump in consumer sentiment a blip.“Whatever happens in the job market, or if inflation continues to rise, we could see sentiment go back down again,” she said. Despite all of those signals, more consumers said this month they think inflation will improve, and their personal finances will improve, too. Michael Green with Simplify Asset Management said that’s just another side effect of human nature: We gotta feel like things are getting better.
Why consumer confidence is a mixed bag right now
The Conference Board’s Consumer Confidence Index for June paints a pretty complex pictiure.











