Consumers Much More Confident This Summer

Consumer confidence hit 101.4 in June, almost a 10-point gain from the 94.6 reading in May. Bloomberg only had the consensus estimate at 97.4, with a range topping out at just 99.0.

After a quick glance, this also appears to be one of the rare post-recession index readings back above the true 100 hurdle. Another interesting view is that the cutoff date for the preliminary results was June 18.

The Conference Board showed that the Present Situation Index increased from 107.1 last month to 111.6 in June, while the Expectations Index advanced to 94.6 from 86.2 in May. The Conference Board said:

Consumer confidence improved further in June, following a modest gain in May. Over the past two months, consumers have grown more confident about the current state of business and employment conditions. In addition, they are now more optimistic about the near-term future, although sentiment regarding income prospects is little changed. Overall, consumers are in considerably better spirits and their renewed optimism could lead to a greater willingness to spend in the near-term.

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The consumer assessment of current conditions improved again in June, and jobs looked better as well, as did the near-term outlook. Additional data from the report is as follows:

• Those saying business conditions are “good” increased from 24.7% to 26.4%.
• Those claiming business conditions are “bad” was virtually unchanged at 17.8%.
• Those stating jobs are “plentiful” increased from 20.6% to 21.4%.
• Those claiming jobs are “hard to get” declined from 27.2% to 25.7%.
• The percentage of consumers expecting business conditions to improve over the next six months rose from 16.0% to 18.5%.
• Those expecting business conditions to worsen decreased from 11.3% to 9.8%.
• Those anticipating more jobs in the months ahead increased from 14.7% to 17.8%.
• Those anticipating fewer jobs declined from 16.6% to 15.1%.
• The proportion of consumers expecting growth in their incomes was virtually unchanged at 17.5%.
• The proportion expecting an income decline edged down from 10.7% to 10.2%.

Whether default risks in Greece and Puerto Rico would be enough to temper the data if the cutoff date were moved to the end of June is something that might need to be considered here. Either way, this shows a far more confident consumer versus expectations.

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