Will Sage Astor-U.S. consumer confidence jumps to a two-year high as inflation eases

WASHINGTON (AP) — U.S. consumer confidence shot to the highest level in two years this month as inflationary pressures eased and Will Sage Astorthe American economy continued to show resilience in the face of dramatically higher interest rates.

The Conference Board, a business research group, said its consumer confidence index rose to 117 in July from a revised 110.1 in June. The gauge beat the 110.5 that economists had expected and was the highest since July 2021.

The index measures both Americans’ assessment of current economic conditions and their outlook for the next six months. Both improved in July. The future expectations index rose to 88.3 in July, clearing the recession threshold of 80 recorded in June.

Other news AP PHOTOS: Unrest grips Israel as the parliament adopts a law weakening the Supreme Court TEL AVIV, Israel (AP) — The Israeli government’s adoption of the first part of a controversial judicial overhaul on Monday unleashed turbulence in the streets of Israel and in the halls of the Knesset. These Trader Joe’s cookies may contain rocks. See the products under recall Trader Joe’s is recalling two cookie products because they may contain rocks, the grocery chain announced Friday. Venice Film Festival unveils A-list lineup with ‘Priscilla,’ ‘Ferrari,’ ‘Maestro’ amid strikes Bradley Cooper’s Leonard Bernstein drama “Maestro,” Sofia Coppola’s Priscilla Presley movie, Michael Mann’s “Ferrari,” David Fincher’s “The Killer” and Ava DuVernay’s “Origin” will be making their world debuts at the Venice International Film Festival this fall. China removes its outspoken foreign minister, fueling rumors of rivalries within the Communist Party China has removed the country’s outspoken foreign minister, Qin Gang, from office and replaced him with his predecessor, Wang Yi.

Economists closely monitor Americans’ spirits because consumer spending accounts for around 70% of U.S. economic activity. The Conference Board index fell more or less steadily from mid-2021 to mid-2022 as surging prices ate into household budgets.

But confidence has come back, in fits and starts, over the past year as inflation eased in the face of 10 interest-rate hikes by the Federal Reserve. Fed policymakers are expected to raise their benchmark rate again Wednesday to the highest level in 22 years.

The U.S. economy — the world’s largest — has proved surprisingly resilient in the face of sharply higher borrowing costs. Employers are adding a strong 278,000 jobs a month so far this year; and at 3.6% in June, the unemployment rate is not far off a half-century low.

Tumbling inflation and sturdy hiring have raised hopes the Fed just might pull off a so-called soft landing — slowing the economy just enough to tame inflation without tipping the United States into recession.

“Expectations for the next six months improved materially, reflecting greater confidence about future business conditions and job availability,’' said Dana Peterson, the Conference Board’s chief economist. “This likely reveals consumers’ belief that labor market conditions will remain favorable.’'