Consumer Confidence Makes Unexpected Gain in June

Consumer confidence held stronger in June, versus the preliminary expectations. The Conference Board released its Consumer Confidence Index, which showed a moderate increase in June over May: 118.9 versus 117.6.

The Bloomberg consensus estimate had called for another drop down to 116.7 in June. The Wall Street Journal panel of economists had projected that June would dip even lower to 116.0, expecting a third decline after the University of Michigan’s consumer sentiment reading showed a drop.

The Present Situation Index increased to 146.3 from 140.6, and the Expectations Index declined to 100.6 from 102.3 last month. The Consumer Confidence Survey had a cutoff date for the preliminary results of June 15.

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According to the Conference Board, consumers’ appraisal of current conditions improved in June. However, consumers were less optimistic about the short-term outlook in June, and their overall outlook for the labor market remained mixed. These were the individual numbers and points shown for June:

• Those saying business conditions are “good” increased from 29.8 percent to 30.8 percent.
• Those saying business conditions are “bad” declined from 13.9 percent to 12.7 percent.
• Consumers’ assessment of the labor market was also more positive.
• Those stating jobs are “plentiful” rose from 30.0 percent to 32.8 percent.
• Those claiming jobs are “hard to get” decreased slightly from 18.3 percent to 18.0 percent.
• The percentage of consumers expecting business conditions to improve over the next six months decreased from 21.5 percent to 20.4 percent.
• Those expecting business conditions to worsen declined marginally from 10.3 percent to 9.9 percent.
• The proportion expecting more jobs in the months ahead increased from 18.6 percent to 19.3 percent.
• Those anticipating fewer jobs increased from 12.1 percent to 14.6 percent.
• The percentage of consumers expecting an improvement in their income rose from 19.1 percent to 22.2 percent.
• The proportion expecting a decline increased slightly from 8.7 percent to 9.2 percent.

Lynn Franco, Director of Economic Indicators at The Conference Board, said of June’s increase:

Consumer confidence increased moderately in June following a small decline in May. Consumers’ assessment of current conditions improved to a nearly 16-year high. Expectations for the short-term have eased somewhat, but are still upbeat. Overall, consumers anticipate the economy will continue expanding in the months ahead, but they do not foresee the pace of growth accelerating.

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