After a sharp decline in April, consumer confidence improved in June for a second straight month, as the economy began to reopen and unemployment claims showed improvement.
The Consumer Confidence Index, reported by the Conference Board, rose 12.2 points from 85.9 to 98.1 in June, the largest monthly gain since November 2011. The Present Situation Index jumped 17.8 points from 68.4 to 86.2, and the Expectation Situation Index increased 8.4 points from 97.6 to 106, almost back to February level.
Consumers’ assessment of current business conditions improved in June. The shares of respondents rating business conditions “good” remained slightly rose by 1.0 percentage point at 17.4%, while those claiming business conditions “bad” fell by 8.0 percentage points to 43.2%. Meanwhile, consumers’ assessment of the labor market was also favorable. The share of respondents reporting that jobs were “plentiful” increased by 4.3 percentage points, while those saw jobs as “hard to get” decreased by 5.4 percentage points.
Consumers were less pessimistic about the short-term outlook. The share of respondents expecting business conditions to improve remained virtually unchanged at 42.6%, while those expecting business conditions to deteriorate fell from 20.5% to 15.3%. However, expectations of employment over the next six months were mixed. The share of respondents expecting “more jobs” slightly fell by 1.1 percentage points to 38.4%, while those anticipating “fewer jobs” declined by 5.7 percentage points to 14.2%.
Despite the overall improvement, consumer confidence still remained below pre-pandemic levels and the Present Situation Index suggested that economic conditions remained weak. Looking near-term, consumers are less pessimistic but not expecting a significant pickup in economy activity.
The Conference Board also reported the share of respondents planning to buy a home within six months. The share of respondents planning to buy a home rose to 6.5% in June. The share of respondents planning to buy a newly constructed home jumped to 1.7%, and for those who planning to buy an existing home marginally increased to 3.3%.
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