Consumer confidence in the U.S. has unexpectedly seen a substantial improvement in the month of June, according to a report release by the Conference Board on Tuesday, with the group's consumer confidence index jumping to a five-year high.
The Conference Board said its consumer confidence index surged up to 81.4 in June from a downwardly revised 74.3 in May. Economists had been expecting the index to dip to 75.0 from the 76.2 originally reported for the previous month.
With the unexpected increase, the consumer confidence index rose for the third consecutive month, reaching its highest level since hitting 87.3 in January of 2008.
Lynn Franco, Director of Economic Indicators at the Conference Board, said, "Consumers are considerably more positive about current business and labor market conditions than they were at the beginning of the year."
"Expectations have also improved considerably over the past several months, suggesting that the pace of growth is unlikely to slow in the short-term, and may even moderately pick up," she added.
The report showed that the present situation index climbed to 69.2 in June from 64.8 in May, reflecting a continued improvement in consumers' assessment of current conditions.
The Conference Board said consumers saying business conditions are "good" held steady at 19.1 percent, while those saying conditions are "bad" fell to 24.9 percent from 26.0 percent.
Consumers also had a more positive appraisal of the job market, with those saying jobs a "plentiful" rising to 11.7 percent from 9.9 percent, while those saying jobs are "hard to get" edged up to 36.9 percent from 36.4 percent.
The report also showed an improvement in consumers' expectations regarding the short-term outlook, with the expectations index rising to 89.5 in June from 80.6 in May.
Consumers expecting business conditions to be better over the next six months rose to 20.3 percent from 18.7 percent, while those expecting conditions to worsen fell to 11.4 percent from 12.2 percent.
The Conference Board said the outlook for the labor market was also more optimistic, with consumers expecting more jobs in the months ahead improving to 19.6 percent from 16.3 percent, while those anticipating fewer jobs dropped to 16.1 percent from 20.0 percent.
Meanwhile, the proportion of consumers expecting their incomes to increase dipped slightly to 15.2 percent from 15.6 percent.
Friday morning, Thomson Reuters and the University of Michigan are scheduled to release their revised report on consumer sentiment in June. Economists expect the consumer sentiment index to be upwardly revised to 83.0 from the preliminary reading of 82.7.
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