Consumers' spirits at highest since 2008

In this June 17, 2014 photo, a shopper looks at an item in the dairy section of a Kroger grocery store in Richardson, Texas. The Conference Board releases the Consumer Confidence Index for June on Tuesday, June 24, 2014.

In this June 17, 2014 photo, a shopper looks at an item in the dairy section of a Kroger grocery store in Richardson, Texas. The Conference Board releases the Consumer Confidence Index for June on Tuesday, June 24, 2014.

Wednesday, June 25, 2014

WASHINGTON -- U.S. consumers are more confident about the economy than they have been in more than six years.

The Conference Board's confidence index rose to 85.2 this month from a revised 82.2 in May, the private research group said Tuesday. The June figure is the highest since January 2008, a month after the recession officially began.

"More and more consumers seem to recognize that there's some improvement underway in the labor markets," said Mark Vitner, senior economist at Wells Fargo Securities LLC in Charlotte, N.C. "The job market has been slow to improve and now that things are finally picking up, we're beginning to see that in the consumer confidence numbers."

While more Americans are optimistic about business conditions and the outlook for jobs, fewer expect their incomes will grow over the next six months."More and more consumers seem to recognize that there's some improvement under way in the labor markets," said Mark Vitner, senior economist at Wells Fargo Securities LLC in Charlotte, N.C. "The job market has been slow to improve and now that things are finally picking up, we're beginning to see that in the consumer confidence numbers."

"Still, the momentum going forward remains quite positive," Lynn Franco, a Conference Board economist, said in a statement. "Expectations regarding the short-term outlook for the economy and jobs were moderately more favorable, while income expectations were a bit mixed." Franco said.

The index compiled by the Conference Board shows that confidence has been rising steadily since bottoming at 25.3 in February 2009. It's well above last year's average of 72.3. But it still hasn't returned to full health. Before the recession, the index usually topped 90.

Consumers' attitudes are closely watched because their spending accounts for about 70 percent of U.S. economic activity.

Consumers registered the most favorable assessment of current business conditions since March 2008, and their outlook for the next months rose to highest level since August 2013. The percentage saying jobs are "plentiful" was 14.7 percent, highest since May 2008.

"Americans appear to have had a bit more of a spring in their step over the past two months," Jennifer Lee, senior economist with BMO Capital Markets, wrote in a research note.

An improving jobs market has brightened Americans' outlook.

The U.S. economy generated more than 200,000 jobs in May for the fourth-straight month -- the longest such streak since 1999. The unemployment rate has dropped to 6.3 percent in May from 7.5 percent a year ago.

Icy weather put the economy in a deep freeze the first three months of the year: From January through March, the economy contracted at a 1 percent annual rate -- a figure that might be downgraded even more when the government issues updated first-quarter numbers today.

But economists expect the economy to pick up momentum as the year wears on and to be expanding at a 3 percent annual pace in the second half of 2014.

Information for this article was contributed by Nina Glinski and Alex Tanzi of Bloomberg News.

Business on 06/25/2014