Consumer confidence hits a 16-year high

Consumers seem to be feeling good about the labor market, because The Conference Board reported a consumer confidence index in July that set a new 16-year record.

The index reached 121.1 in July, beating what economists polled by Reuters expected would be a decline to 116.5. This is compared to June's reading of 117.3.

“Consumer confidence increased in July following a marginal decline in June,” said Lynn Franco, Director of Economic Indicators at The Conference Board. “Consumers’ assessment of current conditions remained at a 16-year high (July 2001, 151.3) and their expectations for the short-term outlook improved somewhat after cooling last month. Overall, consumers foresee the current economic expansion continuing well into the second half of this year.”    

The Present Situation Index increased from 143.9 to 147.8, with those saying business conditions are “good” increasing from 30.6 percent to 33.3 percent, while those saying business conditions are “bad” virtually unchanged at 13.5 percent. Those stating jobs are “plentiful” rose from 32.0 percent to 34.1 percent, while those claiming jobs are “hard to get” decreased slightly from 18.4 percent to 18.0 percent

Meanwhile, the Expectations Index rose from 99.6 last month to 103.3. The percentage of consumers expecting business conditions to improve over the next six months increased from 20.1 percent to 22.9 percent, while those expecting business conditions to worsen declined from 10.0 percent to 8.2 percent.

The proportion expecting more jobs in the months ahead was unchanged at 19.2 percent, but those anticipating fewer jobs decreased from 14.6 percent to 13.3 percent. However, the percentage of consumers expecting an improvement in their income declined moderately from 20.9 percent to 20.0 percent, while the proportion expecting a decline increased from 9.3 percent to 10.0 percent.