The Conference Board Consumer Confidence Index went up in June, reaching its highest level since the COVID-19 pandemic took hold in March 2020, marking the fifth month in a row that the index increased. Consumer confidence offers a window into people’s perception of economic conditions and how positive they’re feeling about spending on goods and services.
Lynn Franco, senior director of economic indicators at The Conference Board, said in a press release on Tuesday (June 29) that current conditions are up, as are short-term optimism and expectations about business conditions and personal finance.
“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,” Franco added.
The Consumer Confidence Index increased to 127.3 in June, up from a May reading of 120.0. The Present Situation Index — based on how people feel about the current business and labor market conditions — went up from 148.7 to 157.7 in May. The Expectations Index — perceptions about the short-term outlook for income, business and jobs — went to 107, up from May’s reading of 100.9.
Regarding the labor market, almost 55 percent of individuals indicated that they felt jobs are “plentiful,” whereas in May, 48.5 percent felt that way. Some 10.9 percent of people surveyed said they felt that jobs are “hard to get,” down from May’s 11.6 percent.
Last week’s report from the Bureau of Economic Analysis showed a slight drop in personal income in May to $414.3 billion, down 2 percent from the month prior. The decline followed the drop in pandemic relief funding as well as a decrease in pandemic unemployment assistance and jobless benefits.
The University of Michigan’s Consumer Sentiment Index in June hit its second-highest level since the pandemic took hold, 85.5 over the previous month’s 82.9. Those surveyed also said they anticipated inflation to increase 4.2 percent over last year and long-term prices to go up 2.8 percent over May.