Consumer confidence index surprises, recession will "knock on the door" of the US in the next 6-12 months?

The results of a survey by the Conference Board released on June 27 showed that in June 2023, US consumer confidence unexpectedly rose to its highest level in the past 18 months, mainly due to the positive financial outlook of households.

Một quầy bán đồ ăn trên đường phố New York, Mỹ (Nguồn: Tân Hoa xã)

A food stall on the street in New York, USA. (Source: Xinhua)

In June, the US consumer confidence index reached 109.7 - the highest level since January 2022, up from 102.5 in May.

Rising consumer confidence shows consumers are optimistic about their finances despite the US Federal Reserve's repeated interest rate hikes to curb inflation.

“Although household incomes are expected to decline slightly in June, this month’s survey results suggest that households’ financial health is improving,” said Dana Peterson, chief economist at the Conference Board.

She predicts that families' financial situation will improve in the next 6 months.

According to this expert, consumer confidence increased most clearly among people under 35 years old and those with incomes over 35,000 USD/year.

However, Ms. Peterson warned, the world's largest economy still faces the risk of recession at some point in the next 6-12 months.

The Fed paused its rate-hike cycle earlier this month after 10 straight hikes, but left open the possibility of two more rate hikes before the end of the year.

According to CME Group data, there is a more than 75% chance that the US central bank will decide to raise its benchmark lending rate by 0.25 percentage points at its next policy meeting on July 25-26.

Source