Consumer confidence far surpassed expectations in June, jumping 7.2 points to 109.7 and more than 4 points above Econoday's high estimate. Jobs currently hard-to-get are slightly favorable, down 2 tenths to 12.4 percent, but jobs currently plentiful are very favorable, up 3.5 points to 46.8 percent in a result that hints at strength for the June employment report. These gains along with a strong uptick in those describing current business conditions as good, up 4 percentage points to 23.7 percent, lifted the present situation component by 7.4 points to 155.3.

But the strength of June's report really lies in the expectations component, up 7.8 points to 79.3. Improvement in future business conditions is a plus as is employment with more seeing more jobs ahead and substantially fewer consumers, 16.0 versus May's 21.3 percent, seeing the jobs market shrinking. Future income data also improved. Gains in these specific readings will have forecasters lifting their estimates for the beleaguered leading indicators report where consumer expectations are a component.

Another positive which is lifting spirits is confidence in the stock market. Bulls rose 4.5 percentage points to 34.7 percent and now outnumber bears at 30.2 percent. This is the first time bulls have been in front since coming out of Covid.

This report together with new home sales really give a lift to Econoday's Consensus Divergence which is at 35 to indicate that US data are significantly beating estimates. The more the data beat estimates, the more likely it is for the Federal Reserve to resume tightening.

The consumer confidence index is expected to rebound slightly in June to a 103.7 consensus versus May's 102.3 which was better than expected but still down 1.4 points from April. This index has sat at depressed levels for the past year.

The Conference Board's confidence report surveys consumers on their assessments of the labor market, business activity, and their own financial conditions. The survey is conducted by Toluna, an online community platform. (Conference Board and Toluna)

The pattern in consumer attitudes and spending is often the foremost influence on stock and bond markets. For stocks, strong economic growth translates to healthy corporate profits and higher stock prices. For bonds, the focus is whether economic growth goes overboard and leads to inflation. Ideally, the economy walks that fine line between strong growth and excessive (inflationary) growth.

This balance was achieved through much of the nineties and, in large part because of this, investors in the stock and bond markets enjoyed huge gains. It was during the late nineties that the consumer confidence index hit its historic peak, reaching levels that were never matched during the subsequent 2001 to 2007 expansion nor during the long expansion following the Great Recession.

Consumer spending accounts for more than two-thirds of the economy, so the markets are always dying to know what consumers are up to and how they might behave in the near future. The more confident consumers are about the economy and their own personal finances, the more likely they are to spend. With this in mind, it's easy to see how this index of consumer attitudes gives insight to the direction of the economy. Just note that changes in consumer confidence and retail sales don't move in tandem month by month.