Consumer Confidence Holding Steady Ahead of June Jobs Report – Forbes Advisor

Americans continue to anticipate bright days ahead for the economy as we reach the mid-point of the unofficial summer session.

Consumer confidence dropped half a point this week to rest at 61.9 out of 100, but overall confidence continues to be more than nine points above the pandemic average in the Forbes Advisor-Ipsos U.S. Consumer Confidence Weekly Tracker.

The survey, conducted by Ipsos, measures consumer sentiment over time.

Unemployed respondents, parents and people aged 18-24 were among the demographic groups who saw a small dip in confidence this week, contributing to the small overall change. Americans earning more than $100,000 per household also expressed a slight drop in confidence.

The White House admitted last week that it would fall short of its goal to have 70% of American adults vaccinated against Covid-19 by Independence Day. As of June 30, about 54% of people age 12 or older had been fully vaccinated, according to Centers for Disease Control and Prevention (CDC) data.

But more than six in 10 Americans still agree that the economy will recover quickly once pandemic restrictions are relaxed.

All in all, signs are pointing to economic improvements—so much so that the National Retail Federation (NRF), a trade group for retailers, revised its sales forecast upward for the year.

“Our initial forecast was made when there was still great uncertainty about consumer spending, vaccine distribution, virus infection rates and additional fiscal stimulus,” NRF Chief Economist Jack Kleinhenz said in a statement. “Since then, we have seen spending grow, vaccines have become available to virtually anyone who wants one, infections have fallen and additional stimulus in the form of the American Rescue Plan has been signed into law.”

But much of that anticipated consumer spending will depend on how quickly the American job market continues to bounce back from the crisis.

Jobs Confidence High Despite “Wait and See” Warnings from Economists

Almost two-thirds of respondents said they’re now more confident in job security for themselves, their family and friends than they were six months ago.

The jobs index, which measures job security confidence, job loss experience and employment outlook, has slipped from its pandemic high of 69.7 in early June to 68.4 this week. But its growth has still come a long way from last year’s warranted period of pessimism—jobs confidence had not yet surpassed 60 (out of 100) at the start of 2021.

Payroll processor ADP’s June employment report counted 692,000 new jobs added to private-sector payrolls last month. More than 330,000 of those jobs were in the leisure and hospitality fields that were decimated during pandemic closures last year.

Meanwhile, 364,000 new applications for unemployment were filed nationwide last week, a decrease of 51,000 from the week prior. It’s the lowest level for initial claims since the pandemic began, the Department of Labor noted in its weekly release.

But Americans should keep in mind that monthly job growth is likely to fluctuate more than it did prior to the pandemic, even if the employment situation continues to trend in the positive. That’s the warning from a White House Council of Economic Advisors blog post examining recent jobs data this week, which advised that monthly jobs reports “provide a less clear signal of the health of the U.S. economy right now than it would in normal economic conditions.”

Instead of worrying about month-to-month fluctuations in job growth—including seasonal shifts we’ll see from summer into fall—the economic advisors encouraged a focus of trends over single-month data.

Daniel Zhao, senior economist at employment platform Glassdoor, explained in a Twitter thread that initial claims will likely fall further in coming weeks as more states end federal pandemic unemployment programs early. Without the additional $300 per week, many claimants will have their weekly payment reduced dramatically, in some cases to zero because they’ve exhausted their state benefits.

Friday’s jobs report is expected to show modest improvement in the country’s overall employment situation. But the economy still has 7 million fewer jobs than it did prior to the pandemic. And as of May 2021, about 40% of unemployed people had been out of work for more than half a year.

Survey methodology: Ipsos, which surveyed 961 respondents online on June 29 and 30, provided the results exclusively to Forbes Advisor. The survey is conducted weekly to track consumer sentiment over time, using a series of 11 questions to determine whether consumers feel positively or negatively about the current state of the economy and where it looks to be going in the future.