According to a recent report by private research group The Conference Board, U.S. consumer confidence saw significant improvement in July, surpassing expectations. This increase in confidence has raised hopes of avoiding a recession in the near future.
The consumer confidence index for July climbed to 117.0, up from an upwardly revised figure of 110.1 in June. Economists surveyed by The Wall Street Journal had predicted a more modest rise to 112.0.
This positive trend marks the second consecutive month of improvement, following a period of decline earlier in the year.
The expectations-specific index, which gauges consumer outlook, rose to 88.3 in July from 80.0 in June. This suggests that consumers no longer anticipate a recession in the U.S. economy.
While The Conference Board still predicts a recession by year-end, it acknowledges the improved mood among consumers.
“Despite the rise in interest rates, consumers are feeling more optimistic, likely due to lower inflation and a robust labor market,” noted the Board.
The board’s measure for current business and labor-market conditions also saw an increase, rising to 160.0 in July from 155.3 in June. This indicates that more consumers are expressing positive sentiment about the jobs market.
Dana Peterson, chief economist at The Conference Board, commented on the findings, stating, “Headline confidence seems to have broken free from the stagnant trend observed over the past year.” She also mentioned that this increased confidence spans across all age groups and income levels.