July 27, 2023

The University of Michigan’s US Consumer Sentiment gauge jumped +12.7% in July to 72.6. This is up +41.0% from a year ago, but remains well below pre-Covid levels.

The Conference Board’s US Consumer Confidence index rose +6.9 points in July to 117.0, its highest level since July 2021, though it remains below pre-Covid levels.

In July, 21.9% of consumers surveyed by the Conference Board said business conditions were “good,” down from 23.4% in June, while 15.2% said business conditions were “bad,” up from 15.1% in June.

In July, 46.9% of consumers surveyed said jobs were “plentiful,” up from 45.4% in June, while 9.7% of consumers said jobs were “hard to get,” down from 12.6% in June.

U.S. consumer confidence, according the Conference Board survey, is being pulled down more by future expectations than by current conditions, though both are improving.

Personal incomes (not adjusted for inflation) rose +0.4% m/m in May, up +5.5% from a year ago. Taking inflation into account, real disposable personal incomes rose +0.3% m/m in May, up +4.0% from a year ago, back in solid positive territory after declining for the past two years.

Consumer spending rose +0.1% m/m in May, up +6.0% from a year ago. However, with the PCE price index running at +3.8% y/y, a large part of this gets eaten up by inflation. Real spending was flat m/m in May, up a somewhat less impressive +2.1% from a year ago.

The US personal savings rate rose to 4.6% in May, after reaching a near-all-time low of 2.4% in September 2022. U.S. consumers stockpiled significant savings during Covid, though it’s unclear how evenly distributed they are across income levels.