Consumer Confidence Back to Pre-Pandemic Levels

Consumer confidence reached pre-pandemic levels in May despite short-term inflation expectations. The Conference Board’s Consumer Confidence Index found the number of Americans planning to purchase homes, cars, and major appliances all increased as expectations for the economy and job market improved. In May, consumer confidence increased by 7.3 points up to 127.3, the highest levels since the onset of the pandemic. Present expectations increased by 9.0 points and expectations improved by 6.1 points, says the National Association of Home Builders. 

Consumers’ assessment of current business conditions significantly improved in June. The shares of respondents rating business conditions “good” increased by 4.6percentage points to 24.5%, while those claiming business conditions “bad” fell by 1.1 percentage points to 19.5%. Meanwhile, consumers’ assessment of the labor market was also more favorable. The share of respondents reporting that jobs were “plentiful” rose by 5.9 percentage points, while those saw jobs as “hard to get” declined by 0.7 percentage points.

Consumers were considerably more optimistic about the short-term outlook. The share of respondents expecting business conditions to improve increased from 31.0% to 33.3%, while those expecting business conditions to deteriorate decreased from 14.4% to 10.6%. However, expectations of employment over the next six months were mixed. The share of respondents expecting “more jobs” fell by 2.0 percentage points to 25.7%, while those anticipating “fewer jobs” declined by 1.5 percentage points to 16.0%.

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