American consumer confidence rebounded this month to the highest level since November after drooping in June.
The Conference Board, a business research group, said Tuesday that its consumer confidence index rose to 135.7 in July from 124.3 in June. The bounce back from last month’s drop was much stronger than economists expected.
The index measures consumers’ assessment of current economic conditions and their expectations for the next six months. Both rose substantially in July.
Consumers shrugged off trade tensions with China and an economy showing some signs of slowing.
Economists keep close watch on consumers’ spirits because their spending accounts for about 70% of U.S. economic activity. The government reported last week that consumer spending rose at a 4.3% annual rate from April through June, the fastest pace since the end of 2017.
“These days, it seems that everywhere you turn, the news regarding the consumer is strikingly good,” Stephen Stanley, chief economist at Amherst Pierpont Securities, said in a research note.
The overall economy, measured by gross domestic product, grew at a 2.1% pace in the second quarter, down from 3.1% from January-March. But Americans are enjoying unusual job security: The unemployment rate has come in below 4% for 13 of the past 15 months.
Lynn Franco, senior director of economic indicators at the Conference Board, says the sustained confidence should continue to support robust spending in the near-term.