Job gains, faster growth boost optimism about U.S. economy
WASHINGTON (MarketWatch) — Americans are now more confident now about the economy than at any point in the past seven years, according to a new survey.
The consumer confidence index leaped to 90.9 in July from a revised 86.4 in June, marking the highest level since October 2007, the privately run Conference Board said Tuesday . Economists polled by MarketWatch had expected the index to slip to 85.0.
Consumers are feeling more chipper about improved economic growth and a sharp upturn in hiring. The economy likely grew at a 3.2% pace in the spring after a 2.9% contraction in the first quarter, economists project. And the U.S. had added at least 200,000 jobs a month for five straight months, one of the best stretches of hiring since the recession ended in mid-2009.
“Strong job growth helped boost consumers’ assessment of current conditions, while brighter short-term outlooks for the economy and jobs, and to a lesser extent personal income, drove the gain in expectations,” said Lynn Franco, director of economic indicators at board.
In July, the present situation index, a measure of current conditions, rose to 88.3 from 86.3.
The future expectations index climbed to an even higher 92.7 from 86.4.
“Recent improvements in consumer confidence, in particular expectations, suggest the recent strengthening in growth is likely to continue into the second half of this year,” Franco said.
The proportion of those reporting jobs as “plentiful” rose to 15.9% in July from a revised 14.6% in June. That’s the highest rate this year, though just half as much as the precession peak.
Yet despite the improvement in confidence, consumers are still not as optimistic as they were in the years leading up to the 2007-2009 downturn. The consumer-confidence index averaged 103.4 in the seven years prior to the Great Recession.
