U.S. consumers remain optimistic: July’s confidence index is about the same as June’s, after gains in each of the prior 5 months – and the highest since Feb. 2020.
NEW YORK – The Conference Board Consumer Confidence Index was relatively unchanged in July, following gains in each of the prior five months. The Index now stands at 129.1, up from 128.9 in June.
The Present Situation Index – based on consumers’ assessment of current business and labor market conditions – rose from 159.6 to 160.3. The Expectations Index – based on consumers’ short-term outlook for income, business, and labor market conditions – was virtually unchanged at 108.4, compared to 108.5 last month.
“Consumer confidence was flat in July but remains at its highest level since February 2020,” says Lynn Franco, senior director of economic indicators at The Conference Board. “Consumers’ appraisal of present-day conditions held steady, suggesting economic growth in Q3 is off to a strong start. Consumers’ optimism about the short-term outlook didn’t waver, and they continued to expect that business conditions, jobs and personal financial prospects will improve.”
Franco says short-term inflation expectations eased slightly but they’re still elevated. “Spending intentions picked up in July, with a larger percentage of consumers saying they planned to purchase homes, automobiles, and major appliances in the coming months.,” she added, and “consumer spending should continue to support robust economic growth in the second half of 2021.”
Consumers’ appraisal of current business conditions improved slightly in July.
• 26.4% of consumers said business conditions are “good,” up from 25.2%. • 19.3% of consumers said business conditions are “bad,” up from 19.1%.
Consumers’ assessment of the labor market was relatively flat.
• 54.9% of consumers said jobs are “plentiful,” up from 54.7%. • 10.5% of consumers said jobs are “hard to get,” unchanged from June.
Expectations six months from now
Consumers’ optimism about the short-term business conditions outlook eased slightly in July.
• 33.4% of consumers expect business conditions will improve, down from 33.7%. • 10.5% expect business conditions to worsen, down from 10.8%.
Consumers were mixed about the short-term labor market outlook.
• 27.7% of consumers expect more jobs to be available in the months ahead, up from 26.6%. • Conversely, 16.8% anticipate fewer jobs, up from 15.7%.
Consumers remained upbeat about their short-term financial prospects.
• 20.6% of consumers expect their incomes to increase, up from 20.0%. • Only 8.6% expect their incomes will decrease, up from 8.4%.
The monthly Consumer Confidence Survey is conducted for The Conference Board by Toluna, a technology company that delivers real-time consumer insights and market.