Americans are feeling fairly bullish about the US economy: A key measurement of consumer confidence just jumped to its highest level since January 2022.
The Conference Board’s Consumer Confidence Index was 109.7 in June, rising from 102.5 the month before, according to a report released Tuesday.
The latest survey from the business research and membership organization continued to show that consumers retained a far sunnier outlook about the present than what could come in the months ahead. Both the present situations index and the expectations index rose from May; however, the latter remains at a level that flashes a recession warning signal, the Conference Board noted.
“If packed-full restaurants and airports were not enough to convince you that consumers are feeling good at the moment, look at the present situation index, which notched its best monthly gain since December 2022,” Wells Fargo economists wrote in a note issued Tuesday. “In level terms, only two months have been higher for the present situation index in the past three years: those being June and July 2021.”
The labor market, which has softened somewhat but remains historically tight and strong, continues to give a boost to confidence. The share of consumers who viewed jobs as “plentiful” increased to 46.8% from 43.3%.
“Greater confidence was most evident among consumers under age 35, and consumers earning incomes over $35,000,” Dana Peterson, chief economic at the Conference Board, said in a statement. “Nonetheless, the expectations gauge continued to signal consumers anticipating a recession at some point over the next 6 to 12 months.”
Some of those recession fears are fading, it seems: Tuesday’s report also showed a decline in the number of consumers who are expecting a recession. In June, 69.3% of consumers said a recession is “somewhat” or “very likely.” That’s down from 73.2% in May.
Consumers indicated their plans to purchase homes and cars have slowed, and they’re pulling back more on vacation plans, including travel domestically.
“This is an important indicator of desires to spend on services ahead, which may be a signal that post-pandemic ‘revenge spending’ on travel may have peaked and is likely to slow over the rest of this year,” Peterson said.
