Consumer confidence jumps in June

U.S. consumer confidence rose in June to its highest level since January 2022 even as some consumers still expect a recession.

The Conference Board’s Consumer Confidence Index rose to 109.7 in June, the highest reading since January 2022, and up from 102.5 in May.

The rise in consumer confidence in June reflects improved current conditions and a pop in expectations, according to Dana Peterson, chief economist at The Conference Board.

“Greater confidence was most evident among consumers under age 35, and consumers earning incomes over $35,000,” she added.

The Present Situation Index — based on consumers’ assessment of current business and labor market conditions—rose to 155.3 in June (from 148.9 last month) on improved views of both business and employment conditions. The Expectations Index — based on consumers’ short-term outlook for income, business, and labor market conditions — rose to 79.3, up from 71.5 in May.

“Indeed, the spread between consumers saying jobs are ‘plentiful’ versus ‘not so plentiful’ widened, indicating upbeat feelings about a labor market that continues to outperform,” Peterson said. “Likewise, expectations for the next six months improved materially, reflecting greater confidence about future business conditions and job availability.”

Peterson noted that while the Expectations Index remained a hair below the threshold (80) signaling recession ahead, a new measure found considerably fewer consumers now expect a recession in the next 12 months compared to May.

On a six-month moving average basis, plans to purchase autos and homes have slowed, after picking up earlier in 2023, which may reflect rising costs to finance big-ticket items as the Fed continues to raise interest rates, according to the report.

In other findings, vacation plans within the next six months continued to flag, led largely by declines in plans to 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.

Findings from the June report are below.

Present Situation

Consumers’ assessment of current business conditions was more positive in June:

• 23.7% of consumers said business conditions were “good,” up from 19.7% last month.
• 16.3% said business conditions were “bad,” down from 16.7%.

Consumers’ appraisal of the labor market also improved.

• 46.8% of consumers said jobs were “plentiful,” up from 43.3%.
• 12.4% of consumers said jobs were “hard to get,” slightly lower than 12.6% last month.

Expectations Six Months Hence

Consumers were marginally more optimistic about the short-term business conditions outlook in June:

• 14.2% of consumers expect business conditions to improve, up from 13.2%.
• Meanwhile, 17.7% expect business conditions to worsen, down from 21.4%.

Consumers’ assessment of the short-term labor market outlook was more favorable.

• 15.5% of consumers expect more jobs to be available, up from 13.8%.
• Moreover, 16.0% anticipate fewer jobs, down from 21.1%.

The monthly Consumer Confidence Survey, based on an online sample, is conducted for The Conference Board by Toluna, a technology company that delivers real-time consumer insights and market research through its innovative technology, expertise, and panel of over 36 million consumers.