Consumers continued to feel upbeat about the economy.
The Conference Board’s Consumer Confidence Index increased again in June following a rise last month. The index now stands at 85.2. Both components of the index rose this month. The present situation component increased to 85.1 from 80.3, while the expectations index rose to 85.2 from 83.5.
Lynn Franco, director of economic indicators at The Conference Board, said, “Consumer confidence continues to advance, and the index is now at its highest level since January 2008 [when it was at 87.3]. June’s increase was driven primarily by improving current conditions, particularly consumers’ assessment of business conditions.”
She added that the momentum going forward “remains quite positive.”
IHS’ Chris G. Christopher Jr., director of U.S. Consumer Economics, said that consumer confidence rose despite “higher food prices and elevated fears that gasoline prices are headed up.” He noted that several “confidence measures by household income bracket indicate it is upper-income brackets that are feeling significantly more optimistic in recent months.”
He cautioned that confidence could take a hit during the summer months if food prices continue to rise and consumers start to feel the pinch at the gas pump when they fuel their cars. That’s because consumers from lower-income households have a hard time with higher food and gasoline prices.
Among the respondents to the latest Conference Board survey, those who said business conditions are “good” rose to 23 percent from 21.1 percent. Their assessment of the job market was also favorable, with 14.7 percent stating jobs are “plentiful,” up from 14.2 percent last month.
As for short-term expectations looking out six months, those who expect business conditions to improve rose to 18.8 percent from 17.7 percent last month. On the jobs front, 16.3 percent of consumers said they expect more jobs in the months ahead, up from 15.2 percent in May.
Despite the positive assessment in current conditions and the short-term outlook, fewer respondents — at 15.9 percent — expect their incomes to grow, compared with 18 percent last month. However, those who expect their incomes to fall also declined, to 12.1 percent from 14.5 percent in May.