Tuesday may have marked the first day of a two-day Federal Open Market Committee (FOMC) meeting, but investors and economists should take at least some comfort in that the consumer confidence reading was almost unchanged in July from June. Stocks have hit all-time highs, U.S. bond yields have risen from their lows and the Brexit-fears now sort of seem like they were very overblown as far as the real impact in the United States.

The Conference Board released the July Consumer Confidence reading at a level of 97.3, after a reading of 97.4 in June. Again, it’s like Brexit was just noise. We would note that the 0.1-point drop was actually more muted than if you looked back to a month ago, and that is because the prior 98.0 reading was revised down to 97.4.

What should stand out here is just how much the number was above expectations. Reuters was projecting that consumer confidence would be just 95.9. Dow Jones (Wall Street Journal) was calling for a reading of 96.3, and Bloomberg was calling for a consensus of 96.0.

Before dismissing Brexit too much, what needs to be considered is that the endgame there is simply unknown. It is not a risk that disappeared at all. Still, it may be months before we start to see the actions around such an exit.

The Present Situation Index increased to 118.3 in July from 116.6 in June, and the Expectations Index ticked lower to 83.3 in July from 84.6 in June.

They often say that the devil is in the details, so we wanted to look through the guts of the report. Many of the comments were mixed. Consumers’ assessment of present-day conditions improved slightly in July. Their broader optimism regarding the short-term outlook was slightly less favorable in July. Consumers’ outlook for the labor market was marginally more favorable than last month. Consumers’ appraisal of the labor market was little changed from last month. These were shown as follows:

• Those stating business conditions are “good” increased from 26.8% to 28.1%.
• Those saying business conditions are “bad” also rose, from 18.3% to 19.0%.
• Those claiming jobs are “plentiful” declined marginally from 23.2% to 23.0%, however those claiming jobs are “hard to get” also decreased, from 23.7% to 22.3%.
• The percentage of consumers expecting business conditions to improve over the next six months decreased from 16.6% to 15.9%.
• Those expecting business conditions to worsen increased from 11.2% to 12.3%.
• The proportion expecting more jobs in the months ahead was virtually unchanged at 14.0%.
• Those anticipating fewer jobs decreased from 17.7% to 17.0%.
• The percentage of consumers expecting their incomes to increase declined from 18.2% to 16.6%.
• The proportion expecting a decrease also declined, from 11.3% to 10.8%.

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Lynn Franco, Director of Economic Indicators at the Conference Board, said:

Consumer confidence held steady in July, after improving in June. Consumers were slightly more positive about current business and labor market conditions, suggesting the economy will continue to expand at a moderate pace. Expectations regarding business and labor market conditions, as well as personal income prospects, declined slightly as consumers remain cautiously optimistic about growth in the near-term.

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