U.S. consumer confidence rose for a fifth month in June to the highest level since the pandemic began last year as households responded to increased vaccinations and the further re-opening of businesses.
The Conference Board reported Tuesday that its consumer confidence index increased to 127.3 in June, up from a May reading of 120.0.
The June increase reflected an improvement in consumers’ assessment of current conditions.
Consumer sentiment is expected to keep rising in coming months which will provide more support for consumer spending, which accounts for 70% of economic activity.
“Consumers’ short-term optimism rebounded, buoyed by expectations that business conditions and their own financial prospects will continue improving in the months ahead,” said Lynn Franco, senior director of economic indicators at the Conference Board.
Franco noted that while short-term expectations about inflation had increased, this had had little impact on consumers’ confidence about purchasing big-ticket items. The proportion of consumers planning to purchase homes, automobiles and major appliances all rose as did intentions to take a vacation.
Consumers’ appraisal of current business conditions increased with 24.5% viewing conditions as good, up from 19.9% in May.
Consumers’ assessment of the labor market was also up with 54.4% of consumers saying jobs were plentiful, up from 48.5% in May, while 10.9% of consumers saw jobs as hard to get, down from 11.6% in May.