Consumer confidence rose to 109.7 in June, up from 102.5 in May—the highest recorded reading since January 2022, according to the latest data from The Conference Board.
The Consumer Confidence Index details consumer attitudes, buying intentions, vacation plans and consumer expectations for inflation, stock prices and interest rates to determine business conditions.
“Consumer confidence improved in June to its highest level since January 2022, reflecting improved current conditions and a pop in expectations,” said Dana Peterson, chief economist at The Conference Board. “Greater confidence was most evident among consumers under age 35, and consumers earning incomes over $35,000. Nonetheless, the expectations gauge continued to signal consumers anticipating a recession at some point over the next six to 12 months.”
The Present Situation Index—based on consumers’ assessment of current business and labor market conditions—increased to 155.3 from 148.9 last month. For current business conditions, 23.7% of consumers said they were “good,” up from 19.7% last month. Additionally, 16.3% said business conditions were “bad,” down from 16.7%. For the labor market, 46.8% of consumers said jobs were “plentiful,” (up from 43.3%), while 12.4% of consumers said jobs were “hard to get” (slightly down from 12.6%).
“Assessments of the present situation rose in June on sunnier views of both business and employment conditions,” continued Peterson. “Indeed, the spread between consumers saying jobs are ‘plentiful’ versus ‘not so plentiful’ widened, indicating upbeat feelings about a labor market that continues to outperform. Likewise, expectations for the next six months improved materially, reflecting greater confidence about future business conditions and job availability.”
The Expectations Index—based on consumers’ short-term outlook for income, business and labor market conditions—grew to 79.3 (1985 = 100) from 71.5 in May. The Expectations Index has now remained below 80 (the level associated with a recession) every month since February 2022, with the exception of a brief uptick in December 2022. However, June’s reading was just a shade below 80 and up sharply from last month’s print.
As for consumers’ short-term business conditions outlook, 14.2% expect business conditions to improve (up from 13.2%), and 17.7% expect conditions to worsen (down from 21.4%). For the labor market outlook, 15.5% of consumers expect more jobs to be available (up from 13.8%), and 16% anticipate fewer jobs (down from 21.1%). For short-term income prospects, 16.9% of consumers expect their incomes to increase (down from 18.9%), and 11.9% expect a decrease (up from 11.4%).
“Although the Expectations Index remained a hair below the threshold signaling recession ahead, a new measure found considerably fewer consumers now expect a recession in the next 12 months compared to May,” concluded Peterson. “Meanwhile, on a six-month moving average basis, plans to purchase autos and homes have slowed, after picking up earlier in 2023. This may reflect rising costs to finance big-ticket items as the Fed continues to raise interest rates. Meanwhile, vacation plans within the next six months continued to flag, led largely by declines in plans to travel domestically. This is an important indicator of desires to spend on services ahead, which may be a signal that post-pandemic ‘revenge spending’ on travel may have peaked and is likely to slow over the rest of this year.”
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