The June reading of the Conference Board’s Consumer Confidence Index is a sign of good things to come with respect to hiring and spending in months ahead.
The index increased to 127.3 in June from a revised up 120 in May. The topline index is traditionally interpreted as a forward-looking indicator of consumer spending and is very sensitive to employment conditions. That characteristic contrasts with the University of Michigan’s confidence survey, which is more sensitive to movements in the price of regular unleaded gasoline prices.
More to the point, the Conference Board’s labor differential index—or the “jobs plentiful” less jobs “hard to get”—surging to 107 from a revised 100.9 strongly implies that the overall unemployment rate for June will reflect a decline upon its publication on Friday.
The RSM forecast of employment conditions anticipates a net change of 750,000 in total employment and a decline to 5.6% in the official unemployment rate. The amount of respondents that noted jobs are plentiful increased to 54.4% in the Conference Board’s June survey, compared to 48.5% in May. That’s the highest point that measure has hit in over twenty years.
The “hard-to-get” jobs number declined to 10.9% which is also a two-decade low. Forward-looking firm managers should anticipate a surge in demand for services as the consumers who have a prodigious quantity of excess savings and fresh income provide what we think will be the defining economic narrative during the second half of 2021.
