Consumer confidence in the U.S. has risen to its highest level in over five years this month. Bloomberg’s Alexandria Baca reports that the Conference Board’s index jumped to 81.4, which is higher than all of the forecasts given to Bloomberg.
An average of 77 analysts polled by Bloomberg showed expectations that it would reach 75.1. In May the consumer confidence index was revised to 74.3. Bloomberg said its poll showed estimates ranging from 72 to 79.5, indicating that June’s reported number ended up being higher than any of the 77 economists who had been surveyed by Bloomberg.
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Factors Contributing To Rising Consumer Confidence
A number of economic factors are working together to increase consumer confidence. Residential property values are on the rise. Home prices, new home sales and orders for durable goods rose more than expected. Also unemployment numbers are falling, which in turn has increased demand for housing and automobiles.
However, there are still concerns that may be holding confidence back. Worries about the end of the Federal Reserve’s bond buying program have put a squeeze on U.S bonds, sending yields to highs not seen in some time. Also rising interest rates could pose a risk to consumer confidence if hiring is negatively affected.
Other Confidence Measurements
The Conference Board’s consumer present conditions gauge jumped to 69.2 this month, which is also the highest it has been in five years. Last month the gauge was at 64.8. The gauge measuring six-month expectations also rose this month, climbing to 89.5, which is its highest level in more than two years.
According to Bloomberg, these numbers are in line with the Consumer Comfort Index, which has been staying around the five-year high it hit in April. Last week U.S. households were more optimistic about the nation’s economy than they have been in over five years.
The index also showed that 19.6 percent of consumers now believe more jobs will become available in the next six months. That’s the highest level it has been at in eight months. Last month, 16.3 percent of consumers thought more jobs would be available in the next six months.
In addition, 11.7 percent of those surveyed believe jobs are plentiful right now. That percentage is the highest it has been since September 2008.