Consumer confidence reached its highest level since before the pandemic in another sign that the economy is surging back.
The Conference Board, a nonprofit group that publishes several economic indicators, announced on Tuesday that the Consumer Confidence Index is at 129.1 for July, up from 128.9 last month. The index is closely followed and measures U.S. optimism toward the economy by gauging saving and spending trends. It was the highest level since February 2020, before COVID-19 began devastating the economy.
“Consumers’ appraisal of present-day conditions held steady, suggesting economic growth in Q3 is off to a strong start,” said Lynn Franco, senior director of economic indicators at the Conference Board. “Consumers’ optimism about the short-term outlook didn’t waver, and they continued to expect that business conditions, jobs, and personal financial prospects will improve.”
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According to the group, 26.4% of consumers appraised current business conditions as good, which is up more than 1 percentage point from June, while 19.3% said business conditions are bad, a slight increase from the month prior. More consumers (33.4%) expect business conditions will improve in the coming six months than think business conditions will worsen (10.5%).
Another trend that economists are watching closely is the labor market. Across the country, there have been employers, particularly in low-wage industries, struggling to hire workers, which has resulted in boosted wages and new signing and retention bonuses.
A majority of consumers, nearly 55%, said that jobs in the United States are plentiful, while just 10.5% said that jobs are hard to get right now.
Despite rising inflation, spending is anticipated to increase as more people become vaccinated and the economy continues to heat up. The federal government has also enacted and is planning to infuse trillions of dollars of spending into the economy as part of President Joe Biden’s agenda.
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“Spending intentions picked up in July, with a larger percentage of consumers saying they planned to purchase homes, automobiles, and major appliances in the coming months,” said Franco. “Thus, consumer spending should continue to support robust economic growth in the second half of 2021.”
