American consumer confidence unexpectedly slipped in June dragged down by the unsettled and escalating trade dispute with China.

As President Trump heads to a meeting with Chinese leader Xi Jinping at the G-20 summit in Japan next week the conditions of the two economies are an important backdrop to negotiations that will bear directly on global growth for the next year.

The Conference Board’s consumer confidence index declined to 121.5 in June from April’s revised 131.3. A much more modest drop to 131.2 had been predicted.   “The escalation in trade and tariff tensions earlier this month appears to have shaken consumers’ confidence,” wrote Lynn Franco, Senior Director of Economic Indicators in the statement accompanying the release.

It is also possible that the drop in sentiment in June  is a cumulative reflection of the recent weak payroll numbers, 56,000 in February and 75,000 in May.  The June figure will be reported next Friday July 5th, 185,000 is expected.

Today’s result brought the index back to its lowest level since September 2017.  “Although the Index remains at a high level, continued uncertainty could result in further volatility in the Index and, at some point, could even begin to diminish consumers’ confidence in the expansion,” noted Ms Franco.

The present situation index which gauges consumers’ opinions on current business and labor market conditions fell to 162.6 from 170.7 in May. The expectations index which measures consumers’ assessments for the near-term future for their income and general business and labor market conditions decreased to 94.1 in June from 105.0 the prior month.

This decline is in contrast to the Michigan consumer sentiment survey which showed a preliminary reading of 97.9 in June not far below the 101.4 post-recession high of 101.4 from March 2018 and down from May’s 100.0 score.

The US consumer economy has generally remained strong with wage gains near the top of their decade range and 3.6% unemployment at a 50 year low.  Job creation, though, has declined this year.  The fourth quarter average for non-farm payrolls of 233,000 dropped to 174,000 in the first three months of this year and April and May averaged just 150,000.

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility.

Analysis feed

Latest Forex Analysis

Editors’ Picks

EUR/USD trims Williams-related gains, nears 1.1200 figure

The shared currency retreated sharply vs. its American rival after testing the 1.1280 price zone, as Fed’s representative rushed to counter Williams’ dovish words. EUR/USD at daily lows ahead of Michigan Consumer Confidence Index.


GBP/USD trading marginally lower daily basis but above 1.2500

The Pound gave back some of its Thursday’s gain on dollar’s relief. The GBP/USD pair broke a daily descendant trend line coming from June’s high and holds above it, leaving little room for sellers to act.


USD/JPY: bears pausing, still in control

Japanese National Inflation steady at 0.7%YoY in June. US Michigan Consumer Sentiment Index expected at 98.5 in July. USD/JPY corrective advance falling short of signaling an interim bottom in place.


Michigan Consumer Sentiment survey preview: The pool of happiness spreads

The University of Michigan will issue its preliminary Survey of Consumers for July on Friday July 18th at 12:30 pm GMT. Consumer sentiment expected to gain modestly in July. Optimism should be supported by strong June jobs report.

Read more

Gold consolidates around $ 1440, eyes US data for fresh direction

Gold (futures on Comex) extends its side-trend around the 1440 mark into the mid-European session, having stalled its retreat from 2019 highs of 1454 near 1437 region.

Gold News