A monthly measure of consumer confidence has increased sharply on more upbeat assessments of business and labor conditions, a gain that could translate into increased spending in the months ahead.
The Conference Board reported that its Consumer Confidence Index climbed 6.8 points to 101.4 in June. Components of the index tracking present conditions and expectations both increased.
“Over the past two months, consumers have grown more confident abut the current state of business and employment conditions. In addition, they are now more optimistic about the near-term future, although sentiment regarding income prospects is little changed,” said Lynn Franco, director of economic indicators for the conference board. “Overall, consumers are in considerably better spirits, and their renewed optimism could lead to a greater willingness to spend in the near term.”
The Conference Board, a 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.
For June, more upbeat assessment of current business and labor conditions pushed up the present situation component of the index 4.5 points to 111.6.
The proportion of consumers responding to the survey upon which the June index was based who described business conditions as “good” rose 1.7 points to 26.4 percent. The share of those who characterized conditions as “bad” was virtually unchanged at 17.8 percent.
The proportion of consumers who described jobs as “plentiful” increased eight-tenths of a point to 21.4 percent. The share of those who said jobs were “hard to get” decreased 1.5 points to 25.7 percent.
A more optimistic outlook also pulled up the expectations component of the index 8.4 points to 94.6 in June.
The share of consumers who expect business conditions to improve over the next six months rose 2.5 points to 18.5 percent. The proportion of those anticipating worsening conditions fell 1.5 points to 9.8 percent.
The share of consumers who expect more jobs to become available in coming months advanced 3.1 points to 17.8 percent. The proportion of those who believe fewer jobs will be available retreated 1.5 points to 15.1 percent.
While 17.5 percent of consumers expect higher incomes, unchanged from May, 10.2 percent anticipate lower incomes, down a half point.