The consumer sentiment report has been strong but less so for the consumer confidence report, at least until today’s data for June where the index jumped nearly 6 points to a much higher-than-expected 98.0. This is the best reading of the year, since October last year.
Both main components show strength with expectations up 6.0 points to 84.5 and the present situation up 5.1 points to 118.3. Strength in the former, led by income expectations, points to confidence in the jobs outlook while strength in the latter, led by a 1.1 percentage point dip in jobs hard to get to 23.3 percent, points to ongoing demand for labor.
Buying plans, however, show less strength with autos down and housing especially down where the reading is suddenly at its lowest point since August last year. Another negative in the report is a 2 tenths drop in the report’s inflation expectations to 4.7 percent which is very low for this reading.
On net, however, this report is positive, offering reasons for optimism that the economy’s central strength — the labor market — remains solid.