A monthly measure of consumer confidence has rebounded to its highest level in more than six years as the outlook for business and labor conditions continues to improve.
The Conference Board reported that its Consumer Confidence Index jumped three points to 85.2 in June. The latest reading is the highest reading since January 2008, when the index stood at 87.3.
“June’s increase was driven primarily by improving current conditions, particularly consumers’ assessments of business conditions. Expectations regarding the short-term outlook for the economy and jobs was moderately more favorable, while income expectations were a bit mixed. Still, the momentum going forward remains quite positive,” said Lynn Franco, director of economic indicators for the Conference Board.
The business research and membership association bases the index on the results of monthly surveys of U.S. households. Economists closely monitor the index because consumer spending accounts for more than two-thirds of economic activity in the country.
More optimistic appraisals of current conditions pushed up the present situation component of the index nearly five points to 85.1.
The share of consumers responding to the survey upon which the June index was based who characterized business conditions as “good” rose nearly two points to 23 percent. The proportion of those who said conditions are “bad” fell almost two points to 22.8 percent.
While 14.7 percent of consumers said jobs are “plentiful,” up half a point, another 31.8 percent said jobs are “hard to get,” down four-tenths of a point.
A more upbeat outlook also pushed up the expectations component of the index nearly two points to 85.2.
The proportion of consumers who expect business conditions to improve over the next six months increased more than a point to 18.8 percent. However, the share of those anticipating worsening conditions rose seven-tenths of a point to 11.4 percent.
While 16.3 percent of consumers said they expect more jobs to become available in coming months, up more than a point, another 18.7 percent of consumers said they believe fewer jobs will be available, down two-tenths of a point.
Fewer consumers expect their incomes to grow — down more than two points to 15.9 percent. However, the proportion of those who expect their incomes to decline fell more than two points to 12.1 percent.