United States: Consumer confidence rebounds to eight-month high in July
The Conference Board’s monthly consumer confidence index rebounded from June’s sharp fall, climbing to 135.7 in July from June’s revised 124.3 (previously reported: 121.5), and surpassing market expectations of 125.0. The index consequently remains above the 100-point threshold that separates consumer optimism from pessimism.
July’s upturn came on a broad-based improvement in sentiment. Households’ appraisal of present conditions improved in July, particularly due to consumers’ more upbeat assessment of current labor market conditions. The labor differential—the difference between the percentage of respondents who state that jobs are plentiful and those who say that jobs are hard to get—rose from 28.2 in June to 33.4 in July.
Regarding the outlook for the next six months, the expectations index returned to optimistic territory in July after briefly falling below the 100-point threshold in June. Households were more upbeat about both the future business climate and the labor market outlook as the number of respondents anticipating improved business conditions and more jobs increased, while the number of respondents expecting the contrary decreased. Consumers also perceived their income prospects to be more favorable.
Commenting on this month’s reading, Lynn Franco, senior director of economic indicators at The Conference Board, noted:
“After a sharp decline in June, driven by an escalation in trade and tariff tensions, Consumer Confidence rebounded in July to its highest level this year. […] These high levels of confidence should continue to support robust spending in the near-term despite slower growth in GDP.”