Economic Watch: Consumer Confidence Best in Nearly Seven Years

U.S. consumer confidence increased in July, according to a new survey from the private research group The Conference Board.

Its Consumer Confidence Index, which improved in June, increased again. It now stands at 90.9, up from 86.4 in June. The Present Situation Index increased to 88.3 from 86.3, while the Expectations Index rose to 92.7 from 86.4 in June.

“Consumer confidence increased for the third consecutive month and is now at its highest level since October 2007,” said Lynn Franco, director of economic indicators at The Conference Board. “Strong job growth helped boost consumers’ assessment of current conditions, while brighter short-term outlooks for the economy and jobs, and to a lesser extent personal income, drove the gain in expectations.”

She said recent improvements in consumer confidence, in particular expectations, suggest the recent strengthening in growth is likely to continue into the second half of this year.

Consumers’ assessment of current conditions were mixed in July. Those claiming business conditions are “good” edged down to 22.7% from 23.4%, while those stating business conditions are “bad” was virtually unchanged at 22.7%.

Consumers’ appraisal of the job market was more favorable. Those saying jobs are “plentiful” increased to 15.9% from 14.6%, while those claiming jobs are “hard to get” remained unchanged at 30.7%.

Expectations were more optimistic in July. The percentage of consumers expecting business conditions to improve over the next six months increased to 20.2% from 18.4%, while those expecting business conditions to worsen held steady at 11.5%. Slightly more consumers expect their incomes to grow, 17.3% in July versus 16.7% in June, while those expecting a drop in their incomes declined to 11% from 11.4%.