Inflationary Pressure Drags Down US Consumer Confidences To 16 Months Low In June

Today, the US consumer confidence data has been published which shows a sharp fall in June. It has plunged by 4.5 points to a 98.7 level this month. Analysts are thinking that high inflationary pressures have dragged down the consumer confidences to that low. The data has been reported to a 21 months low level, since February 2021. Common consumers are much worried about the high inflation rate, they are anticipating that economic growth will further weaken in the second half of the current year. Many analysts were also expecting a recession can be seen due to this.

Earlier, US Federal Reserve Chairman Jerome Powell said that the central bank is trying to combat the high inflation level, which was recorded at an 8.6% YoY gain in the last month. Powell, however, said that recession is a 'possibility', but they are trying to avoid it. US Fed has already hiked its interest rate to control the inflation rate, but it is only having little impact on inflation, which is at a 40 years high level now. Gas prices and fuel prices are soaring, while the prices of groceries have increased the most in decades. Additionally, the housing rate is also very expensive now in the country. So, consumer confidences have also been affected severely.

Additionally, according to a Bloomberg report, "The present situation index, based on consumers' assessment of current business and labor market conditions, slipped to 147.1 from 147.4 last month. The expectations index, based on consumers' short-term outlook for income, business, and labor market conditions, tumbled to 66.4 - the lowest level since March 2013 - from 73.7 in May."

Commenting on the present economic condition, Lynn Franco, senior director of economic indicators said at The Conference Board in Washington, "Expectations have now fallen well below a reading of 80, suggesting weaker growth in the second half of 2022 as well as the growing risk of recession by year-end," Bloomberg reported.