There's more good news than meets the eye with the consumer confidence report where a nearly 2 point dip to 80.3 masks a strong gain in the present situation component. The assessment of the present situation offers the consumer's view of month-to-month conditions and a sharp gain here, of nearly 5 points to 73.6, hints at gains for the sweep of July's economic data.
Jobs hard to get, which is a closely watched month-to-month reading on the consumer's assessment of the current jobs market, fell to 35.5 percent for a sizable 1.6 percentage point decline from June which is very good news. This reading is perhaps the very first meaningful indication for Friday's July employment report, given distortions in weekly jobless claims data tied to summer retooling in the auto sector. The Dow is now moving higher, very likely in reaction to this specific reading.
But outside the assessment of the current jobs market, there is significant weakness in this report. The expectations component is down 6.4 points to 84.7 in a drop that reflects lack of confidence in the outlook for the jobs market, which of course is in contrast to the current assessment. Fewer consumers see job openings rising six months from now and more see job openings contracting.
A positive detail in the report, one that is not measured in the headline index, is strength in buying plans. More consumers expect to buy a house in the next six months as well as a vehicle. Expectations for appliance purchases are also up.
The big rise underway in gas prices is not affecting the consumer, at least yet. This points to resilience and confirms confidence in the present jobs market which is allowing consumers to look beyond the rise underway in pump prices. Inflation expectations are unchanged at 5.5 percent.
Another positive factor to consider is the tough comparison with June when many readings were at recovery highs. The message from the consumer is caution in the longer term outlook but confidence in the near term.
Market Consensus before announcement
The Conference Board's consumer confidence index was at a recovery best, at 81.4 in June and up nearly 7 points from a revised 74.3 in May for the third straight strong gain. The assessment of the present situation is also up for a third straight month, at a recovery best 69.2 which hints at general strength for the slate of June indicators. But the gain here does mask a small uptick in those who say jobs are hard to get, now at 36.9 percent for a 5 tenths increase that does not point to new gains for the June employment report.
Expectations were also at a recovery best, up nearly 9 points to 89.5 and reflecting rising confidence in the long-term outlook for the jobs market.