In spite of market predictions to the contrary, consumer confidence held its ground for the month of June. The confidence index, which is based on both present and future sentiment, sent mixed signals to investors with a rise in future expectations and a fall in present condition numbers.
The overall consumer confidence index fell a mere 10 basis points in June to 83.5. The present situation confidence fell to 64.9 for June from 67.3 in May, while consumer confidence in the economic situation six months from now rose to 95.9 from 94.5.
“In fact, consumers have grown increasingly optimistic over the last three months,” said Conference Board research director Lynn Franco.
The unemployment level is the main factor that drives the consumer confidence level and with expectations the highest they have been since the beginning of the war with Iraq we can only hope for more good news down the road. Economists are speculating that the release of these numbers were the driving factor behind the Federal Reserve’s policy-making committee dropping interest rates quarter point instead of a half point.
Not only are consumers more optimistic about the economy, but CFOs are also seeing a silver lining. According to a study by Duke University’s Fuqua Business School, over half of the CFOs surveyed are more optimistic about their companies prospects this quarter.
This number is up from 37% last quarter.
