The Conference Board registered across the board gains in its major consumer sentiment categories in its latest sounding on consumer confidence. The base reading – the Consumer Confidence Index – surged into triple-digit territory.
The June increase built on modest gains registered in May.
According to CB, the CCI improved from 94.6 to 101.4, with a score of 100 equal to confidence levels as the existed in 1985.
The Present Situation Index improved from 107.1 to 111.6.
While still underwater in comparison to 1985, the Expectations Index improved from 86.2 to 94.6.
“Consumer confidence improved further in June, following a modest gain in May,” said Lynn Franco, Director of Economic Indicators at The Conference Board. “Over the past two months, consumers have grown more confident about the current state of business and employment conditions. In addition, they are now more optimistic about the near-term future, although sentiment regarding income prospects is little changed. Overall, consumers are in considerably better spirits and their renewed optimism could lead to a greater willingness to spend in the near-term.”
26.4% believe business conditions are presently good, up from 24.7%; and those who say jobs are plentiful improved to 21.4% from 20.6%.
Those expecting business conditions to improve over the next six months improved to 18.5% from 16%. Only 9.8% think conditions will decline, down from 11.3%.
The Conference Board stats are based on research from Nielsen.
RBR+TVBR observation: We are still mainly seeing positive confidence reports on both sides of the coin. Consumers and business executives alike are generally positive about the current direction of the economy.
When sentiments aren’t exactly what you’d call positive, they are at least getting better rather than worse.
Confident consumers are consumers more willing to spend money, and that can lead to a virtuous cycle (the opposite of a vicious cycle) in which the spending spurs business investment, which leads to more hiring, which leads to more consumers able to spend.
We believe the virtuous cycle has been in effect, since the US has for the most part been generating a significant number of jobs during most of the recent reporting periods.
The thing is, most people probably feel like the economy is still rather sluggish. But if you can remember the way things looked in November 2008, it is clear that we are currently in a much better place.
Hopefully, this will be like an old-fashioned locomotive, in which slow but steady gains persist to the point at which a head of steam is built up and the economy shifts into a higher gear.
