Consumer confidence bounces back in June

WASHINGTON: US consumer confidence rebounded in June as businesses reopened, strengthening views that the economic downturn was likely over, though rising Covid19 infections threaten to derail the budding recovery.

The Conference Board said its consumer confidence index rose to a reading of 98.1 this month from 85.9 in May. Still, the confidence index remains 34.5 points below its pre-pandemic level.

Economists polled by Reuters had forecast the index rising to 91.8 in June.

The survey’s present situation measure, based on consumers’ assessment of current business and labour market conditions, increased to a reading of 86.2 this month from 68.4 in May.

The expectations index based on consumers’ short-term outlook for income, business and labor market conditions jumped to 106.0 from a reading of 97.6 in May.

The Conference Board’s so-called labour market differential, derived from data on respondents’ views on whether jobs are plentiful or hard to get, improved to a reading of -3 this month from -12.7 in May. That measure closely correlates to the unemployment rate in the Labor Department’s employment report.

It has dropped from as high as 38.3 in August last year.

The pandemic has unleashed record unemployment, with 30.6 million people collecting unemployment checks in the first week

taxpayer money.

But lawmakers peppered Mnuchin with questions about where the broader package of government relief money was going, and Democrats accused him of not providing enough transparency about the Treasury Department’s efforts. of June.

The closely-followed employment report to be released today is expected to show 3 million jobs created in June on top of the 2.5 million added in May, according to a Reuters survey of economists.

That would still leave payrolls nearly 17 million below their preCovid-19 level. The jobless rate is forecast dipping to 12.3% from 13.3% in May.

The Conference Board survey showed the percentage of consumers expecting an increase in income in the short term climbed to 15.1% this month from 14.6% in May and the proportion anticipating a drop fell to 14.4% from 15.4%.

Manufacturing is also stabilising with a separate report on Tuesday showing a steady pick-up in factory activity in the Midwest. The MNI Indicators’ Chicago Business Barometer rose to a reading of 36.6 in June from 32.3 in May.

Activity in the second quarter, however, slipped 11.8 points to 34.8, the lowest level since the first quarter of 2009.

“The data are signaling a much slower pace of contraction in manufacturing,” said Rubeela Farooqi, chief US economist at High Frequency Economics in White Plains, New York. “However, new flare-ups in virus cases across states, if they are not contained, pose a downside risk to both activity and output.”

A third report showed the S&P CoreLogic Case-Shiller 20-metroarea house price index increased 4% from a year ago in April after rising 3.9% in March.

Mnuchin defended his record of transparency in managing the $2.2 trillion government bailout but he said he would not commit to providing additional information to a panel of inspectors general that have accused him of stonewalling their requests.