US consumer confidence jumps in July, price expectations dip
Consumer confidence in the U.S. jumped in July, breaking out of the sideways range that had been seen throughout much of the past year, the results of a survey showed.
The Conference Board's consumer confidence index increased from a reading of 110.1 for June to 117.0 in July.
Economists had penciled in a reading of 112.0.
In particular, the business lobby group highlighted the improvement in the expectations sub-index, which rose from 80.0 to 88.3. A sub-index tracking the present situation also rose, albeit by less, from 155.3 to 160.0.
"Importantly, Expectations climbed well above 80—the level that historically signals a recession within the next year," the Conference Board said.
"Despite rising interest rates, consumers are more upbeat, likely reflecting lower inflation and a tight labor market. Although consumers are less convinced of a recession ahead, we still anticipate one likely before year-end."
For her part, Conference Board chief economist, Dana Peterson, noted how confidence strengthened across all age groups, as well as among consumers with incomes below $50,000 and those making over $100,000.
Meanwhile, Ian Shepherdson, chief economist at Pantheon Macroeconomics, said he was skeptical that rising confidence in the outlook - or expectations - signalled an impending reacceleration in consumption.
To back up his arguments, he noted how consumer surveys were apparently increasingly politicised in recent years, leading to a "patchier" relationship vis-a-vis spending.
And in the case of a rival survey conducted by the University of Michigan, it was apparent that Democrats were largely responsible for the recent surge.
Shepherdson also noted the one tenth of a percentage point dip in the Conference Board's index for inflation expectations one-year ahead to 5.7%.
A sustained drop in inflation expectations five-to-10 years was also likely to emerge soon, he anticipated.