Consumer confidence came in stronger than expected in June, especially about perceptions about job availability, the Conference Board reported Tuesday in its monthly index.
The New York research group’s confidence index is closely followed for signs about the future direction of consumption, a main driver of the U.S. economy. Confidence rose 3 percentage points over May on the index.
“Expectations regarding the short-term outlook for the economy and jobs were moderately more favorable, while income expectations were a bit mixed. Still, the momentum going forward remains quite positive,” said Lynn Franco, the board’s director of economic indicators.
The strong reading exceeded analyst expectations, and they were heartened by a big jump to a six-year high in the number of survey respondents saying jobs were plentiful.
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“Consumer confidence in June is higher than at any time since January 2008 on a strong improvement in the assessment of current conditions and a modestly better assessment of the economic outlook,” said economists with RDQ Economics, in a research note. “Consumers’ evaluation of the labor market … is the highest since July 2008.”
Given the strong confidence numbers, especially about labor conditions, RDQ Economics thinks June hiring will top 200,000 new positions for the fifth consecutive month.
In another positive economic data point, new home sales, as reported by home builders, also came in above expectations on Tuesday. New home sales rose by 18.6 percent in May, suggesting the housing sector is bouncing back after a sluggish start in 2014 because of a protracted harsh winter.
Earlier this week, the National Association of Realtors reported a modest 4.9 percent increase in sales of existing homes over April numbers.