Consumer confidence hits highest level in nearly seven years

Consumer confidence hit its highest level in nearly seven years with recent jobs growth boosting sentiment, a positive sign for the rest of the year.

The Conference Board said on Tuesday that its confidence index improved for the third straight month in July, rising to 90.9, up from 86.4 in June, the best reading since October 2007, two months before the recession started.

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Lynn Franco, an economist at The Conference Board, said “recent improvements in consumer confidence, in particular expectations, suggest the recent strengthening in growth is likely to continue into the second half of this year.”

Confidence tanked during the recession hitting a low of 25.3 in February 2009 before making gradual increases.

The present situation index increased to 88.3 from 86.3, while expectations rose to 92.7 in July from 86.4 in June.

Consumers' expectations about the future also were more optimistic with those anticipating more jobs in the months ahead increasing to 19.1 percent, up from 16.3 percent in June.

Those saying jobs are "plentiful" increased to 15.9 percent from 14.6 percent, while those claiming jobs are "hard to get" remained unchanged at 30.7 percent.

Those anticipating fewer jobs declined to 16.4 percent from 18.4 percent.

Also, slightly more consumers expect their incomes to grow, 17.3 percent in July versus 16.7 percent in June.

The percentage of consumers expecting business conditions to improve over the next six months increased to 20.2 percent from 18.4 percent, while those expecting business conditions to worsen held steady at 11.5 percent.

The government’s first measure of economic growth for the April-June quarter is set for release on Wednesday with expectations right around 3 percent.

The first three months of the year saw growth fall at an annual rate of 2.9 percent, in part because of a long spate of severe winter weather.

On Friday, the Labor Department will release job figures for July. Last month, the unemployment rate fell to 6.1 percent, the lowest level since September 2008.

Employers added 288,000 jobs in June, which was the fifth straight month of job gains above 200,000, the longest streak since the late 1990s.

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