Consumer confidence bounced back in July to highs not seen in nearly six years as Americans grew more upbeat about the economy, The Conference Board reported today.
The Consumer Confidence Index climbed to 112.6 this month from 105.3 in June, and hasn’t been this high since hitting 114 in August 2001.
“An improvement in business conditions and the job market has lifted consumers’ spirits in July,” Lynn Franco, director of The Conference Board Consumer Research Center, said in a prepared statement. “Looking ahead, consumers are more upbeat about short-term economic prospects, mainly the result of a decline in the number of pessimists, not an increase in the number of optimists. This rebound in confidence suggests economic activity may gather a little momentum in the coming months.”
Consumers were considerably more positive about current-day conditions in July than they were in June, as the present situation index also neared a six-year high. Those claiming conditions are “good” increased to 28.1 percent from 27.3 percent, while those saying conditions are “bad” decreased to 14.4 percent from 16.1 percent. Consumers were also more upbeat about the job market, with those saying jobs are “hard to get” declining to 18.4 percent from 20.5 percent and those claiming jobs are “plentiful” improving to 30.5 percent from 27.6 percent in June.
Consumers were also less pessimistic about the short-term outlook, as the expectations index rose to 94.8 from 88.8. Those expecting business conditions to worsen in the next six months declined to 8 percent from 10.8 percent. However, those anticipating business conditions to improve dipped to 15.4 percent from 16.2 percent.
The outlook for the labor market continued to be mixed, as the percent of consumers expecting more jobs in the months ahead was virtually unchanged at 14.1 percent, while those anticipating fewer jobs decreased to 15.1 percent from 17 percent. The proportion of consumers expecting their incomes to increase in the months ahead declined to 18.8 percent from 19.4 percent in June.
The Consumer Confidence Survey is based on a representative sample of 5,000 U.S. households.