The Conference Board consumer confidence index for June fell to 98.7 points from 103.2 in the previous month, well below analysts’ expectations of 100.5. This is the worst reading since February 2021, while the expectations index fell to the west level since 2013!. Meanwhile, 1-year inflation expectations rise to 8% from 7.5% in May!
Consumer confidence in the US continued to weaken in June, while expectations index plunged to level not seen since 2013. Source: Bloomberg via ZeroHedge
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Create account Try a demo Download mobile app Download mobile appMeanwhile the Richmond Fed composite manufacturing index fell to -19 in June from -9 in May, as two of its three component indexes continue to move lower. The indexes for shipments (-16 vs -14 in May) and volume of new orders (-38 vs -29) declined while the employment index rose (23 vs 8). The wage index also remained elevated, despite a minor downward shift, indicating that a large share of firms continue to report increasing wages. Additionally, the local business conditions index continued to slide in June, falling to -32. Firms are also less optimistic about conditions in the next six months as the expectations index decreased (-19 vs -13). Recent data shows that the economic activity in the second quarter was weak. Nevertheless, the negative factors related to inventories and net exports, which were mainly responsible for the negative reading of GDP in Q1, decreased.
Several local surveys including Richmond Fed composite manufacturing index fell sharply in recent weeks. Source: Bloomberg via ZeroHedge
Also today’s housing market data from April showed that inflationary pressure is not easing at all. Real estate prices continue to rise, despite a slight slump in sales or a massive increase of mortgage interest rates.
In the last few days we can observe a revival in the markets, partly due to the positive news from China. It is worth remembering, however, that the latest upward move may also be related to the rebalancing of portfolios at the end of the quarter, following massive declines in recent weeks. Therefore if the forthcoming data also turn out to be a disappointment, then equity markets may start the third quarter in much worse moods.
