The numbers: The confidence of Americans in the economy jumped in June to the highest level since the coronavirus pandemic slammed the U.S. in March 2020, reflecting a growing sense the that Covid is fading away and that people can get on with their lives.
The closely followed survey of consumer confidence leaped to 127.3 this month from 120 in May, the privately run Conference Board said Tuesday.
Economists polled by The Wall Street Journal had forecast the index would rise to 118.7.
The index has risen for six straight months after taking into account an upward revision in May.
Big picture: The U.S. economy is surging again thanks to a waning pandemic, massive government stimulus and a flush of new jobs being created.
Households are spending plenty of money and businesses are investing heavily to cement their place in a post-pandemic world. Most companies want to hire workers and unemployment is expected to shrink rapidly through the end of the year.
The one potential stumbling block is rising inflation. Inflation expectations among consumers rose to the highest level in several decades.
Key details: Americans are worried about the increase in prices, but they evidently aren’t all that worried. They told pollsters they plan to buy more cars, appliances and houses — big-ticket items that people feel most comfortable buying when time are good.
They are also taking badly needed vacations after a year of sitting at home.
Other good news: The percentage of people who said jobs are plentiful rose to the highest level since 2000, clearly adding to the evidence that most companies are willing to hire.
Part of the survey that asks how consumers feel about the economy right now shot up by almost 10 points to 157.3 — more than double the pandemic low of 68.4 in May 2020.
The so-called current conditions index is now close to pre-pandemic levels and could exceed them in the next few months.
Consumers were optimistic about the future, too. A measure of how Americans view the next six months rose to 107 from 100.9 and was almost back to pre-crisis levels.
What they are saying? “As the virus fades, moods are high,” wrote chief economist Stephen Stanley of Amherst Pierpont Securities. “Households are sitting on a $3 trillion powder keg of extra cash. Let the consumer spending party begin!”
“Confidence is not a perfect indicator of plans to spend, but it is certainly a good thing to have highly confident consumers,” said senior economist Jennifer Lee of BMO Capital Markets.
Market reaction: The Dow Jones Industrial Average
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