Consumer Confidence Jumps in July
The Conference Board, New York, said consumer confidence improved in July as consumers anticipated growth through at least the end of the year.
The company’s Consumer Confidence Index, which had declined slightly in June, jumped to 121.1 in July, up from 117.3 in June. The Present Situation Index increased from 143.9 to 147.8, while the Expectations Index rose from 99.6 last month to 103.3.
“Consumers’ assessment of current conditions remained at a 16-year and their expectations for the short-term outlook improved somewhat after cooling last month,” said Lynn Franco, Director of Economic Indicators with The Conference Board. “Overall, consumers foresee the current economic expansion continuing well into the second half of this year.”
“July was the first time in several months where both of the broadest components of the index increased together, which is a good sign for the U.S. economy and for the consumer,” said Mark Vitner, senior economist with Wells Fargo Securities, Charlotte, N.C. “However, as we have become accustomed to the strong rebound in confidence after the presidential elections last year, we are still waiting for the consumer to put its wallet where its confidence is.”
The report said consumers’ assessment of current conditions improved in July. Those saying business conditions are “good” increased from 30.6 percent to 33.3 percent, while those saying business conditions are “bad” was virtually unchanged at 13.5 percent. Consumers’ appraisal of the labor market was also more favorable. Those stating jobs are “plentiful” rose from 32.0 percent to 34.1 percent, while those claiming jobs are “hard to get” decreased slightly from 18.4 percent to 18.0 percent.
Consumers were also more optimistic about the short-term outlook in July. The percentage of consumers expecting business conditions to improve over the next six months increased from 20.1 percent to 22.9 percent, while those expecting business conditions to worsen declined from 10.0 percent to 8.2 percent.
Consumers’ outlook for the labor market improved. The proportion expecting more jobs in the months ahead was unchanged at 19.2 percent, but those anticipating fewer jobs decreased from 14.6 percent to 13.3 percent. Consumers, however, were not as upbeat about their income prospects as in June. The percentage of consumers expecting an improvement in their income declined moderately from 20.9 percent to 20.0 percent, while the proportion expecting a decline increased from 9.3 percent to 10.0 percent.
