The confidence of American consumers is riding higher.
Consumer confidence rose by more than expected in July, according the Conference Board.
The consumer confidence index rose to 127.4 in July, four-tenths of a percentage point above expectations. June’s reading was revised up from 126.4 to 127.1, indicating confidence was even stronger in June than previously thought.
While the July reading was below the recent high of 130 it is very high by historical standards.
“Consumers’ assessment of present-day conditions improved, suggesting that economic growth is still strong,” said Lynn Franco, Director of Economic Indicators at The Conference Board.“However, while expectations continue to reflect optimism in the short-term economic outlook, back-to-back declines suggest consumers do not foresee growth accelerating.”
That’s likely an accurate assessment. The economy grew at a 4.1 percent pace in the second quarter, the highest level since 2014. It’s unlikely to accelerate to an even higher growth rate in the remainder of the year.
Consumers views of current conditions improved further in July. Just 10.1 percent say business conditions are “bad, down from 11.5 percent a month earlier. Those business conditions are “good” rose to 38.0 percent from 37.2 percent.
The view of the labor market was also improved. Those claiming jobs are “plentiful” increased to 43.1 percent from 40.4 percent. Only 15 percent describe jobs as “hard to get”—unchanged from June.
Consumer optimism about the short-term future, however, was mixed. The share expecting business conditions to improve rose to 23.1 percent from 20.7 percent, while the share expecting worse conditions also rose to 10.8 percent to 9.3 percent. Consumer outlooks on labor and income was similarly split, with positive and negative expectations risings.