After reporting a sharp pullback in U.S. consumer confidence in the previous month, the Conference Board released a report on Tuesday showing confidence rebounded by much more than anticipated in the month of July.
The Conference Board said its consumer confidence index surged up to 135.7 in July after tumbling to a revised 124.3 in June. Economists had expected the index to climb to 125.0 from the 121.5 originally reported for the previous month.
"After a sharp decline in June, driven by an escalation in trade and tariff tensions, Consumer Confidence rebounded in July to its highest level this year," said Lynn Franco, Senior Director of Economic Indicators at The Conference Board.
"Consumers are once again optimistic about current and prospective business and labor market conditions," she added, "In addition, their expectations regarding their financial outlook also improved."
Franco said the high levels of confidence should continue to support robust consumer spending in the near-term despite slower GDP growth.
Reflecting the improvement in consumers' assessment of present-day conditions, the present situation index rose to 170.9 in July from 164.3 in June.
Consumers claiming business conditions are "good" increased to 40.1 percent from 37.5 percent, although those saying business conditions are "bad" also inched up to 11.2 percent from 10.6 percent.
Those saying jobs are "plentiful" also edged up to 46.2 percent from 44.0 percent, while those claiming jobs are "hard to get" dropped to 12.8 percent from 15.8 percent.
The Conference Board also said the expectations index soared to 112.2 in July from 97.6 in June, as consumers were more optimistic about the short-term outlook.
The percentage of consumers expecting business conditions will be better six months from now jumped to 24.0 percent from 19.1 percent and those expecting business conditions will worsen fell to 8.7 percent from 12.6 percent.
Consumers' outlook for the labor market was also more upbeat, with those expecting more jobs in the months ahead rising to 20.5 percent from 17.5 percent and those anticipating fewer jobs slipping to 11.5 percent from 13.9 percent.
The report also said the percentage of consumers expecting an improvement in their short-term income prospects increased to 24.7 percent from 20.5 percent, while the proportion expecting a decrease declined to 6.3 percent from 7.5 percent.
On Friday, the University of Michigan is scheduled to release its revised reading on consumer sentiment in the month of July.
The consumer sentiment index is expected to be unrevised from the preliminary reading of 98.4, which was up slightly from the final June reading of 98.2.
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