Consumer Confidence Improves, But Not Yet To Pre-Pandemic Levels
Consumer confidence levels, while still well below where they stood before the COVID-19 pandemic, saw an increase in June. The Conference Board’s Consumer Confidence Index, which was flat in May, registered an uptick this month and now stands at 98.1, up from 85.9 in May.
The Conference Board’s Present Situation Index, based on consumers’ assessment of current business and labor market conditions, improved from 68.4 to 86.2. The Expectations Index, based on consumers’ short-term outlook for income, business and labor market conditions, also increased to 106 June from 97.6 in May.
“Consumer confidence partially rebounded in June but remains well below pre-pandemic levels,” says Lynn Franco, senior director of economic indicators at The Conference Board. “The re-opening of the economy and relative improvement in unemployment claims helped improve consumers’ assessment of current conditions, but the Present Situation Index suggests that economic conditions remain weak. Looking ahead, consumers are less pessimistic about the short-term outlook, but do not foresee a significant pickup in economic activity. Faced with an uncertain and uneven path to recovery, and a potential COVID-19 resurgence, it’s too soon to say that consumers have turned the corner and are ready to begin spending at pre-pandemic levels.”
Consumers’ appraisal of current conditions improved in June according to the Conference Board’s assessment. The percentage of consumers claiming business conditions are “good” rose from 16.4 percent to 17.4 percent, while those claiming business conditions are “bad” decreased from 51.2 percent to 43.2 percent. Consumers’ assessment of the job market was also more favorable. The percentage of consumers saying jobs are “plentiful” increased from 16.5 percent to 20.8 percent, while those claiming jobs are “hard to get” decreased from 29.2 percent to 23.8 percent.
Consumers’ short-term outlook was also less pessimistic in June. The percentage of consumers expecting business conditions to improve over the next six months was effectively unchanged at 42.6 percent, while those expecting business conditions to worsen decreased from 20.5 percent to 15.3 percent. Consumers’ outlook for the labor market was more mixed. The share expecting more jobs in the months ahead declined from 39.5 percent to 38.4 percent, but those anticipating fewer jobs in the months ahead also decreased, from 19.9 percent to 14.2 percent. Regarding short-term income prospects, the percentage of consumers expecting an increase improved from 14.6 percent to 15.1 percent, while the proportion expecting a decrease declined from 15.4 percent to 14.4 percent.