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According to a report by Bloomberg, U.S. consumer confidence unexpectedly dropped in June, primarily due to public concerns about economic prospects, the job market, and personal financial situations, significantly influenced by the trade policies of the Trump administration.

The Conference Board reported on Tuesday (June 24) that the consumer confidence index fell by 5.4 points to 93, below all economists' forecasts surveyed by Bloomberg. In contrast, economists surveyed by Reuters had predicted the index would rise to 100.

Furthermore, the indicator measuring consumer expectations for the next six months declined by 4.6 points to 69, while the indicator reflecting current conditions dropped by 6.4 points to 129.1.

The decline in confidence nearly offsets about half of the previous month's rebound, highlighting ongoing public worries about the economic impact of the U.S. increase in import tariffs. Despite moderate inflation over the past three months, some consumers have become more cautious about their spending. Stephanie Guichard, a senior economist at the Conference Board, stated, "Consumers are less optimistic about the current business environment than they were in May. Their assessment of current job opportunities has weakened for the sixth consecutive month, but remains in positive territory, reflecting the still robust state of the job market."

The survey conducted by the Conference Board had a cutoff date of June 18, merely five days after Israel launched a series of attacks against Iranian targets. In the survey, the proportion mentioning geopolitical factors only increased slightly.

Regarding the labor market, the percentage of consumers who believe job opportunities are plentiful fell to 29.2%, the lowest level in over four years. Meanwhile, the percentage believing it is hard to find a job slightly decreased. The disparity between these two metrics, a closely watched labor market indicator, fell to 11.1 percentage points, the lowest since March 2021. Although the assessment of current job opportunities has weakened, it still remains positive, indicating the underlying stability of the labor market.

In terms of spending and income expectations, the percentage of consumers expecting higher income in the next six months has decreased. However, at the same time, expectations for personal financial conditions have remained relatively stable, possibly reflecting optimism regarding the rebound in U.S. stock markets and stock outlooks. Conditions for purchasing major goods such as major appliances and electronics are mixed, with car purchase plans remaining unchanged, while the number of respondents planning to buy a home has decreased.

U.S. retail sales fell for the second consecutive month in May, indicating that consumers have curbed their spending following the consumption surge earlier in the year before the tariffs took effect.

Consumer expectations for rising interest rates over the next year increased to 57%, the highest level since October 2023. This survey result may provide important guidance for the Federal Reserve in formulating monetary policy.

Consumer confidence is a vital leading indicator of economic activity, typically influencing spending decisions and economic growth momentum. Analysts point out that uncertainty surrounding trade policy has become a major factor affecting consumer sentiment. As the U.S. continues to adjust its trade strategies, the potential impacts of related policies on the economy remain a focal point for the market. The decline in this confidence index also reflects consumers' cautious attitude towards inflation prospects. While recent inflation data has been relatively mild, public concerns over price increases have not completely dissipated.

The outlook for whether consumer confidence can stabilize will depend on multiple factors, including the clarity of trade policy, the performance of the job market, and overall economic growth trends.