Consumer Confidence Still High Despite Drop in June
The consumer confidence index declined slightly in June, after a solid gain the previous month, according to nonprofit association The Conference Board.
The index dropped to 126.4 this month from a revised 128.8 in May.
“Consumers’ assessment of present-day conditions was relatively unchanged, suggesting that the level of economic growth remains strong,” stated Lynn Franco, director of economic indicators at The Conference Board.
“While expectations remain high by historical standards, the modest curtailment in optimism suggests that consumers do not foresee the economy gaining much momentum in the months ahead.”
Consumers’ perception of present economic conditions was little changed this month. The percentage saying that business conditions are “good” dropped from 38.6 percent to 36.0 percent, while those stating business conditions are “bad” also declined, from 12.6 percent to 11.7 percent.
Consumers’ perception of the labor market was also mixed. The percentage of respondents saying jobs are “plentiful” decreased from 42.1 percent to 40.0 percent, but the percentage of those who claim jobs are “hard to get” also dropped, from 15.6 percent to 14.9 percent.
Meanwhile, the Richmond Fed manufacturing index continued to rise in June, according to results of the most recent survey.
The composite manufacturing index rose from 16 in May to 20 in June, buoyed by strong shipments, new orders, and employment. Respondents also had an increase in the backlog of orders, as the index rose to its highest level of this year.
Firms were optimistic in June, expecting growth to continue across most indicators.
The service sector survey from the Richmond Fed also strengthened in June. The revenues index jumped from 11 in May to 21 this month. Firms also reported strong growth in demand and local business conditions as well as increased business expenditures. They expect conditions to improve further in the next six months, according to the survey.
Overall, the results suggest a firm pace of growth in service-sector activity, stated Goldman Sachs.