For the second straight month, the Consumer Confidence Index from the Conference Board rose strongly, soaring to its highest level since January 2008. Illustrating the increase in sentiment over the past few months, the index has risen from 61.9 in March to 69.0 in April to 74.3 in May and to 81.4 in June, a gain of nearly 20 points in just three months. The rise in the Conference Board’s measure mirrors a similar ascent in a similar index from the University of Michigan and Thomson Reuters. (Note that a revised figure from the University of Michigan will be released on Friday.)
The Conference Board noted that perceptions about the current and future economy were both higher in June, with the largest gains seen in the forward-looking measure. The expectations component has grown from 63.7 in March to 89.5 in June, helping to propel the overall index. The index of present conditions grew from 59.2 to 69.2 over the same time period.
Despite the recent improvements in consumer optimism, it is also clear that Americans continue to worry about pocketbook issues. There was an increase in the percentage of respondents saying that “jobs were plentiful,” up from 9.9 percent in May to 11.7 percent in June. Yet, it is hard to ignore the fact that 36.9 percent said that opposite, with “jobs hard to get.” Likewise, it is positive that fewer individuals expect income decreases, down from 15.3 percent to 14.4 percent, but there was also a decline in the percentage who anticipated income gains, down from 15.6 percent to 15.2 percent.
There were marginal increases in those intending to purchase automobiles and homes, with a slight decrease in appliance spending plans. These correspond with recent data showing higher retail sales in May.
Chad Moutray is the chief economist, National Association of Manufacturers.
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