Consumer Confidence Soars to Recovery High

Consumer confidence is by far at its best level of the recovery, at a much higher-than-expected 90.9 in July vs an already very strong and upwardly revised 86.4 in June. July's level is the highest since December 2007 while the June reading is the second highest since January 2008.

July's gain is led by the expectations component which is up a very sharp 6.3 points to 92.7 for the highest reading since February 2011. The present situation component is up 2.0 points to 88.3 for the highest reading since March 2008.

Among sub-components, income expectations show stand-out strength with more seeing an increase six months from now, at 17.3 percent vs June's 16.7 percent, and fewer seeing a decrease, down 4 tenths to 11.0 percent. This 6.3 percentage point spread between optimists and pessimists is very wide for this reading and points to underlying confidence in the jobs outlook which in fact also shows standout strength with more seeing more jobs opening up, at 19.1 percent for a 2.8 point gain, and fewer seeing fewer jobs ahead, down 2.0 points to 16.4 percent.

Sub-components for the present situation show less strength though more say jobs are currently plentiful, up 1.3 percentage points to 15.9 percent. Though there is no change in the closely watched jobs hard-to-get reading, the level of 30.7 percent is consistent with solid job growth.

Inflation expectations are stable, down 1 tenth to plus 5.4 percent which is low for this reading.

This report is a very favorable mix of readings and points to healthy acceleration for the consumer sector which has not been a leading sector yet for the economy. The Dow is moving to opening highs following today's report.