Following last month's extraordinary divergence between hope (tumbling) and current conditions (soaring), analysts expected some level of convergence but instead the current conditions index continued its dramatic surge higher (almost back to pre-COVID levels) while hope (expectations) rose only modestly to 107 (from a revised 100.9).
The headline Conference Board Consumer Confidence data rose from an upwardly revised 120.0 to 127.3 (smashing expectations of 119.0).
“Consumer confidence increased in June and is currently at its highest level since the onset of the pandemic’s first surge in March 2020,” said Lynn Franco, Senior Director of Economic Indicators at The Conference Board.
“Consumers’ assessment of current conditions improved again, suggesting economic growth has strengthened further in Q2. Consumers’ short-term optimism rebounded, buoyed by expectations that business conditions and their own financial prospects will continue improving in the months ahead."
Inflation expectations reached their highest since 2008...
"While short-term inflation expectations increased, this had little impact on consumers’ confidence or purchasing intentions. In fact, the proportion of consumers planning to purchase homes, automobiles, and major appliances all rose—a sign that consumer spending will continue to support economic growth in the short-term. Vacation intentions also rose, reflecting a continued increase in spending on services.”
So we'll keep buying despite higher prices and expectations for higher prices.
Finally, we note that The Conference Board's jobs data suggests the situation for jobseekers has never been better...
So why do we need continued record handouts?