The consumer outlook zoomed to its second highest level since the recession as Americans gained confidence that the strong job market will produce higher income over the next six months.
The Conference Board's U.S. consumer confidence index soared to 101.4 in June from 94.6, matching the level in March and easily beating the 97.4 median consensus. Except for the January reading of 103.80 this is as high as this indicator has been since August 2007.
Consumer’s views of their immediate situation and future prospects both improved. The index measuring their ‘current situation’ rose to 111.60 in June from 107.1 in May. But it was the surge in 'expectations' to 94.60 from 86.20 that was the biggest driver of the spike in the overall index.
The 'expectations' gauge for May had fallen to the lowest level in two years and though gasoline prices and equities, two obvious ingredients of consumer satisfaction, have moved against consumption, with energy costs increasing and equities declining from May to June, the index nevertheless jumped to its best level in three months.
It may be the hope for higher wages that is insulating consumers from the equity fallout and the reversal in fuel costs.
Two of three employment related indexes improved in June. The measure for those who said that ‘jobs were plentiful’ rose to 21.4. That is the highest score for that index since February 2008. The statistic for those who said ‘jobs were hard to get’ slid to 25.7, which, except for January and February this year, is the lowest incident since March 2008.
The indicator for ‘jobs not plentiful’ climbed slightly to 52.9 in June from 52.2, but even so it was still the third lowest reading in 23 months.
Confidence was not skewed by income. Consumer confidence was positive among every income group except those making $25-$35,000 a year.
The largest increases in confidence came, in decreasing order from folks making $100-$125,000, then $15-25,000 and finally $35-$50,000. Other income levels exhibited marginal improvements.
Likewise the confidence of the head of the household grew among all age groups, though the degree of the increase grew with age, with grownups over 55 exhibiting the largest jump in satisfaction.
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Income: White-under $15,000; yellow-$15-$25,000; green-$25-$35,000; purple-$35-$50,000, red-$50-$75,000; orange-$75-$100,000; blue-$100-$125,000; grey-over $125,000
Age-white-under 35; yellow-35-54; green-over 55