The Conference Board's consumer confidence index is up 6.9 points to 117.0 in July after a small upward revision to 110.1 in June. The June reading is well above the consensus of 111.8 in the Econoday survey of forecasters. It is also the highest since July 2021 when the index was 125.1.

Much of the increase is due to an 8.3 point jump in the index for future conditions to 88.3 in July, the highest since 88.8 in January 2022. However, current conditions also improved with a 4.7 point increase in the index to 160.0, the highest since 166.7 in May 2020.

In July, the only constraint on rising confidence is a dip in perceptions about present business conditions. There are positive contributions from present employment, and for future business conditions, expected employment, and expected personal income. Overall, consumers continue to find the labor market favorable, and look forward to economic expansion with plentiful jobs and rising incomes.

This report has exceeded not only Econoday's consensus for the last three reports but the consensus range as well. Today's result lifts Econoday's Consensus Divergence Index to plus 16 to indicate that recent US data in sum are exceeding economist expectations as they have throughout most of the last three months.

The consumer confidence index is expected to rebound further in July, to a consensus 111.8 versus June's 109.7 which was higher than expected.

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.