A strong jobs market and easing inflation gave consumer confidence a bigger boost than expected in July.
The Conference Board said its index of consumer confidence jumped to 117 this month from 110.1 in June. Economists had expected a milder rise to 112.
The gauge of how consumers feel about current economic conditions rose to 160.0 in July from 155.3 in the prior month. That’s the best reading since the pandemic struck in March 2020.
The expectations measure, which is based on the outlook for conditions six months from now, jumped to 88.3 from 80 in June, the most optimistic reading since the start of the year.
“Consumer confidence rose in July 2023 to its highest level since July 2021, reflecting pops in both current conditions and expectations,” said Dana Peterson, Chief Economist at The Conference Board. “Headline confidence appears to have broken out of the sideways trend that prevailed for much of the last year. Greater confidence was evident across all age groups, and among both consumers earning incomes less than $50,000 and those making more than $100,000.”
Despite the rising optimism, the share of consumers saying a recession is “somewhat” or “very likely” edged up in July. The Conference Board said 70.6 percent of consumers surveyed think a downturn is “somewhat” or “very likely” in the next 12 months.
“Still, recession expectations remained below their recent peak, suggesting fears of a recession have eased relative to earlier this year,” Peterson said.
COMMENTS
Please let us know if you're having issues with commenting.