Consumer Confidence Surges Again In June - June 25, 2013
The Conference Board's Consumer Confidence Index jumped ahead nicely in June rising to a solid reading of 81.4. That was a notably better result than the downwardly revised 74.3 result in place during May. (Initially, the May score had been estimated at 76.2.)
The Present Situation Index, meanwhile, jumped from 64.8 to 69.2, while the Expectations Index soared from 80.6 to 89.5. This across-the-board strength suggests that the Federal Reserve, which last week indicated its desire to slow down the pace of bond buying by yearend and end the massive program by mid-2014, may well be on solid ground. In fact, this stellar result represented the third strong economic report to be issued this morning out of the three surveys in total released. (To wit, the other two reports showed a solid 3.6% increase in orders for durable goods during May and another healthy gain for new home sales last month.)
Meanwhile, Lynn France, the Director of Economic Indicators at the Conference Board observed that “Consumer Confidence increased for the third consecutive month and is now at its highest level since January 2008. Consumers are considerably more positive about current business and labor market conditions than they were at the beginning of the year.”
What was so positive about the report was the broad improvement cited here, with each category gaining ground, as optimism is being sustained, apparently, by the better housing metrics, firming real estate prices, an irregularly better employment situation, and, until very recently, an unrelenting rise in equity prices.
Our sense, as noted, is that the Federal Reserve will now run with the improving numbers in durable goods orders, housing prices, new home sales, and consumer confidence to press ahead with its plans to slow down the pace of bond buying by yearend, or even before.
Importantly, we also sense that the nation's business expansion, which showed a decent, but not a remarkable, 2.4% gain in the first quarter (that rate will be revised tomorrow) will advance in that range in the second half, following a presumed slower pace of growth in the fast-concluding quarter.
At the time of this article's writing, the author did not have positions in any of the companies mentioned.