US Consumer Confidence Retreats Slightly; House Prices Remain Elevated

• According to a survey from the Conference Board, U.S. consumer confidence eased in June amid worries about the economic outlook. However, households remained upbeat about the labour market and expect inflation to moderate over the next year. The mixed survey from the Conference Board on Tuesday also showed that consumers' perceived likelihood of a recession over the next 12 months retreated in June after rising in April and May.
• Labour market resilience is driving consumer spending, underpinning the economy despite the Federal Reserve's hefty interest-rate hikes in 2022 and 2023 to quell inflation. Though fewer consumers planned to buy vehicles and household appliances over the next six months, more plan to go on vacation.
• The Conference Board's consumer confidence index dipped to 100.4 this month from a downwardly revised 101.3 in May. Economists polled by Reuters had forecast the index slipping to 100.0 from the previously reported 102.0. The drop in confidence was concentrated in the 35-54 age group. Confidence improved among consumers under 35 and those 55 years and older.
• The Conference Board said there was no clear pattern for income groups, but noted that on a six-month moving average basis, confidence remained the highest among the under-35 age cohort and those with annual incomes of more than $100,000.
• The share of consumers planning to buy a home was unchanged at a relatively low level for a fourth straight month. That is consistent with so-called hard data on home building and sales, which have shown the housing market regressing since residential investment notched double-digit growth in the first quarter. Higher mortgage rates and house prices are stifling demand. However, house-price appreciation could slow as reduced affordability weighs on demand for housing, contributing to a rise in supply.

(Source: Reuters)