U.S. consumer confidence soared in June to a fresh pandemic high as Americans became more upbeat about the economy and job market.
The Conference Board’s index increased to 127.3 from an upwardly revised 120 reading in May, according to a report Tuesday. The June figure exceeded all forecasts in a Bloomberg survey of economists. Consumers also expected inflation to pick up in the coming year.
As more vaccinations allow the U.S. to reopen in earnest, including in large states such as California and New York, optimism is growing about economic and labor market conditions. The report showed the improvement in confidence is driving a pickup in vacation plans, consistent with a shift toward increased spending on services that will help power the economy.
“While short-term inflation expectations increased, this had little impact on consumers’ confidence or purchasing intentions,” Lynn Franco, senior director of economic indicators at the Conference Board, said in a statement. “In fact, the proportion of consumers planning to purchase homes, automobiles, and major appliances all rose—a sign that consumer spending will continue to support economic growth in the short-term.”
Even though home-purchase plans picked up from May, they have declined from earlier in the year, which probably reflects a surge in prices. A separate report on Tuesday showed national home prices rose in April from a year ago to the highest level in more than three decades.
The group’s measure of current conditions increased this month to 157.7 also a pandemic high, while the expectations gauge improved to 107.
Labor Differential
The share of consumers that said jobs are plentiful increased to a 21-year high of 54.4%. The closely watched labor differential also improved. The share of respondents who said jobs were plentiful exceeded the share of those who said they were hard to get by the most since 2000.
Meanwhile, 18.6% of respondents said they expect their incomes to increase in the next six months, the highest since March 2020.
Confidence is also improving in Europe. European Commission figures on Tuesday showed sentiment climbed to the highest level in more than two decades on greater optimism about services.
U.S. consumers in Tuesday’s report showed 37.4% of respondents intended to take a vacation in the next six months, the most since October. The share intending to travel abroad and to fly rose to pandemic highs.
