NEW YORK: U.S. consumer confidence in July rose to its highest level in two years, amid easing inflation and continued optimism for the labor market despite worries about a recession.
The Consumer Confidence Index climbed to 117 this month, up from 110.1 in June, according to the latest survey released by The Conference Board, a business research group, on Tuesday. It was the highest level since July 2021.
The Present Situation Index improved to 160 from 155.3 last month, and the Expectations Index surged to 88.3 from 80.0 in June, the monthly survey showed.
Economists believe despite rising interest rates, U.S. consumers are more upbeat, likely reflecting lower inflation and a tight labor market.
The consumer confidence increase in July reflected pops in both current conditions and expectations, said Dana Peterson, chief economist at The Conference Board.
“Expectations for the next six months improved materially, reflecting greater confidence about future business conditions and job availability,” Peterson said. “This likely reveals consumers’ belief that labor market conditions will remain favorable.”
Meanwhile, consumers’ perceptions of the likelihood of a recession over the next year ticked up in July, but stayed below the recent peak earlier in the year.
About 70.6 percent of consumers this month said a recession was “somewhat” or “very likely,” up from 69.9 percent in June.
Economists at The Conference Board also warned that the Expectations Index climbed well above 80, a level that signals a recession within the next year.
