WASHINGTON (6/25/14)--Consumer confidence has climbed to its highest level since 2008, according to the Conference Board, which reported Tuesday that its overall gauge of consumer confidence rose 3 points to 85.2 in June.
Shoppers also feel better about their present financial situations, as the present situation survey component climbed nearly 5 points to its highest rate in more than six years.
Further, nearly one-quarter of consumers said they believe business conditions are "good," while the percentage of respondents who believe conditions are unfavorable for business dropped 1.8%.
"Many times these types of swings in the Conference Board measure are associated with a stronger labor market, but in this case, buyers indicated more enthusiasm over current business conditions, which is the conduit by which a stronger labor market will evolve," said Nate Kelley, Moody's analyst (Economy.com June 24).
Bankrate.com also reported this week that its financial security index had rebounded in June as well. (See related story: Half of Americans have little to no emergency savings: Bankrate.)
Despite the improvement in consumer confidence, however, feelings over income prospects have stagnated. From the survey, 72% of people expect their income to remain flat over the next six months, while those who believe their incomes will rise dropped more than 2 percentage points.
The Bureau of Economic Analysis reported Tuesday that personal income actually inched up 0.8% in the first quarter, with income climbing in 46 states. Year-over-year, personal income rose 3.5% in the quarter.
Earnings made up about half of the increase in personal income, with particularly strong quarters recorded for professional services, construction and finance.
Income growth was also spurred by the expansion of Medicaid and the rollout of the Affordable Care Act, which added $22.3 billion to the overall income total.
"As special factors wane and job growth continues to pick up, growth in nominal incomes will be more than double its first quarter rate by the end of the summer," said Marisa Di Natale, Moody's analyst.