American consumer confidence jumped to the highest level of the year in July.
The Conference Board said Tuesday that its consumer confidence index rose to 135.7 in July from 124.3 in June. That surpasses economists expectations and puts the index back near multi-year highs hit last year.
“After a sharp decline in June, driven by an escalation in trade and tariff tensions, Consumer Confidence rebounded in July to its highest level this year,” said Lynn Franco, Senior Director of Economic Indicators at The Conference Board. “Consumers are once again optimistic about current and prospective business and labor market conditions.”
Consumer views of the labor market improved. The share of consumers describing jobs as “hard to get” fell sharply to just 12.8 percent. Those saying jobs are plentiful rose to 46.2 percent, a 2.2 percentage point improvement.
The view of present business conditions improved. The share saying business conditions are “good” rose from 37.5 percent to 40.1 percent. Those saying business conditions are “bad” also increased slightly, from 10.6 percent to 11.2 percent.
The outlook for six-months ahead also improved. The share of consumers expecting business conditions will be better six months from now increased from 19.1 percent to 24.0 percent, while those expecting business conditions will worsen declined from 12.6 percent to 8.7 percent.
The share expecting more jobs in the months ahead increased from 17.5 percent to 20.5 percent, while those expecting fewer jobs decreased from 13.9 percent to 11.5 percent. The percentage of consumers expecting their income to rise increased from 20.5 percent to 24.7 percent, while the proportion expecting their income to fall dropped to 6.3 percent from 7.5 percent.
“These high levels of confidence should continue to support robust spending in the near-term despite slower growth in GDP,” Franco said.
Expectations for inflation also fell, bolstering the case for a Fed rate cut to boost inflation toward the Fed’s 2 percent target.
Consumers seem to have shrugged by trade tensions with China and claims from Democratic presidential hopefuls that the economy is not as good as it seems.