Consumer Confidence Reaches Post-Pandemic High
The Conference Board, New York, said it Consumer Confidence Index rose for the fifth month in a row to its highest level since March 2020.
The index jumped by seven points in June to 127.3, up from an upwardly revised 120.0 in May. The Present Situation Index—based on consumers’ assessment of current business and labor market conditions—rose from 148.7 to 157.7. The Expectations Index—based on consumers’ short-term outlook for income, business and labor market conditions—improved to 107.0, up from 100.9 last month.
“Consumers’ assessment of current conditions improved again, suggesting economic growth has strengthened further in Q2,” said Lynn Franco, Senior Director of Economic Indicators at The Conference Board. “Consumers’ short-term optimism rebounded, buoyed by expectations that business conditions and their own financial prospects will continue improving in the months ahead. While short-term inflation expectations increased, this had little impact on consumers’ confidence or purchasing intentions. In fact, the proportion of consumers planning to purchase homes, automobiles, and major appliances all rose—a sign that consumer spending will continue to support economic growth in the short-term. Vacation intentions also rose, reflecting a continued increase in spending on services.”
“This better-than-expected improvement in June consumer confidence suggests a pickup in consumer activity at the end of the second quarter,” said Tim Quinlan, Senior Economist with Wells Fargo Economics, Charlotte, N.C. “Labor market measures look better than at any time in 20 years.”
Quinlan noted the theme for the first half of 2021 has been one of rising confidence. “The year began on shaky footing with consumer confidence at 87.1, only a few notches ahead of where it was at its nadir during the worst of the pandemic when confidence fell to 85.7,” he said. “But as stimulus checks rolled in, vaccination rates picked up and case counts fell, consumers regained a level of confidence not seen since before the pandemic.”
Other report data:
–24.5% of consumers said business conditions are “good”, up from to 19.9%.
–19.5% of consumers claimed business conditions are “bad”, down from 20.6%.
–54.4% of consumers said jobs are “plentiful”, up from 48.5%.
–10.9% of consumers claimed jobs are “hard to get”, down from 11.6%.
–33.3% of consumers expect business conditions will improve, up from 31.0%.
–Just 10.6% expect business conditions to worsen, down from 14.4%.
–25.7% of consumers expect more jobs to be available in the months ahead, down from 27.7%.
–Conversely, 16.0% anticipate fewer jobs, down from 17.5%.
-18.6% of consumers expect their incomes to increase, up from 16.2%.
–Only 8.5% expect their incomes will decrease, down from 9.3%.