US consumer confidence increased to the highest level since the start of last year on greater optimism about the labor market and the economic expansion.
(Bloomberg) — US consumer confidence increased to the highest level since the start of last year on greater optimism about the labor market and the economic expansion.
The Conference Board’s index rose to 109.7 this month from 102.5 in May, data out Tuesday showed, exceeding all estimates in a Bloomberg survey of economists.
The group’s gauge of current conditions jumped to 155.3, the highest level in almost two years. A measure of expectations — which reflects consumers’ six-month outlook — rose to 79.3. A measure of expected inflation fell to the lowest level since 2020.
“Greater confidence was most evident among consumers under age 35, and consumers earning incomes over $35,000,” said Dana Peterson, the chief economist at the Conference Board. “Nonetheless, the expectations gauge continued to signal consumers anticipating a recession at some point over the next 6 to 12 months.”
About 69% of consumers said a recession is “somewhat” or “very likely” in the next year, the lowest share since late 2022. While general optimism about the outlook for the labor market bolstered the numbers, consumers also indicated they may pull back on major purchases in a sign of growing caution.
More consumers said jobs were “plentiful” in June. The share of respondents reporting that jobs were hard to get edged lower, to 12.4%, and their expectations for the labor market six months from now improved. About 15.5% said they expect more jobs to be available in the coming months.
The difference between the current “plentiful” and “hard-to-get” measures — a metric watched closely by economists as a gauge of labor-market strength — widened to 34.4, erasing much of the previous month’s deterioration.
Buying plans for cars, homes and major appliances slowed, which the Conference Board said may reflect higher borrowing costs. The share of consumers who reported intentions to take a vacation in the next six months fell.
Separate data out Tuesday showed new-home sales in the US advanced in May to the fastest pace in over a year, the latest evidence that the housing market is on a recovery path.
–With assistance from Chris Middleton and Hannah Pedone.
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