Consumer Confidence Returns to 2008 Levels
The Conference Board has released its Consumer Confidence Index for June, and the numbers are looking good. Confidence continues to improve, rising to 85.2 in June from 82.2 in May. The Bloomberg consensus was only 83.7. What really stands out is that this confidence report is the highest reading since January of 2008.
The Present Situation Index rose to 85.1 in June from 80.3 in May. The Expectations Index rose to 85.2 in June from 83.5 in May. Some investors may point to the current conditions looking better than the expectations component, but the good news is that they are nearly the same reading now, even if the big jump was tied to present situations.
Those consumers claiming business conditions are "good" increased to 23.0% from 21.1%. Those claiming "bad" business conditions fell to 22.8% from 24.6%.
Even jobs are being viewed more favorably, a continuing theme. Those stating jobs are "plentiful" rose slightly to 14.7% from 14.2%. Those claiming jobs are "hard to get" also fell modestly to 31.8% from 32.2%. Consumers expecting more jobs in the months ahead increased to 16.3% from 15.2%, and those expecting fewer jobs slid lower to 18.7% from 18.9%.
The percentage of consumers expecting business conditions to improve over the next six months rose to 18.8% in June from 17.7% in May. It was interesting to see that those expecting business conditions to worsen rose to 11.4% in June from 10.7% the previous month.
Fewer consumers expect their incomes to grow. Only 15.9% expect a raise, versus 18.0% from May, but consumers who expect a drop in pay also fell to 12.1% in June from 14.5% in May.
The Conference Board's cutoff date for the preliminary results was June 13. Tuesday's report said:
Consumer confidence continues to advance and the index is now at its highest level since January 2008 (87.3). June's increase was driven primarily by improving current conditions, particularly consumers' assessment of business conditions. Expectations regarding the short-term outlook for the economy and jobs were moderately more favorable, while income expectations were a bit mixed. Still, the momentum going forward remains quite positive.
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Filed under: Economy