Board: Lifting of lockdowns pushes US consumer confidence index above predictions in June.

01 Jul 2020 / 00:44 H.

WASHINGTON: The Conference Board today said the lifting of lockdowns to stop the coronavirus

Similar improvement was seen in consumers' assessments of present conditions and future expectations, but The Conference Board warned the index remains weak, with activity below where it was before the pandemic.

Confidence was up from 85.9 in May, while the Present Situation Index improved from 68.4 to 86.2.

"The reopening of the economy and relative improvement in unemployment claims helped improve consumers' assessment of current conditions, but the Present Situation Index suggests that economic conditions remain weak," said Lynn Franco, senior director of economic indicators at The Conference Board.

The expectations index measuring consumers' short-term outlook for economic conditions increased to 106 from 97.6 in May, which Ian Shepherdson of Pantheon Macroeconomics said was above its average before the pandemic.

The percentage of people expecting business conditions to worsen in the next six months decreased, while those expecting it to improve held steady at 42.6%.

Moderate improvement was seen in consumers' impressions of the job market and economy. Respondents saying business conditions are "good" jumped a point to 17.4, while the percentage of those saying jobs are "plentiful" went up more than four points to 20.8.

But whether any of this positivity can withstand the surge in coronavirus cases across the country, which has prompted some state and local authorities to reverse reopening measures, remains to be seen.

"Faced with an uncertain and uneven path to recovery, and a potential CovidD-19 resurgence, it's too soon to say that consumers have turned the corner and are ready to begin spending at pre-pandemic levels," Franco said.

In another development, Treasury Secretary Steven Mnuchin said US President Donald Trump's administration is considering further steps to provide aid to businesses and workers harmed by efforts to contain the coronavirus.

Mnuchin said the "tremendous amount of funding" already approved by Congress is helping to shore up the economy, which should improve in the latter half of the year.

But any additional relief "would be targeted to certain industries that have been especially hard-hit by the pandemic, with a focus on jobs and putting all American workers who lost their jobs, through no fault of their own, back to work," he said in testimony prepared for delivery to the House Financial Services Committee.

The Treasury secretary was due to appear alongside Federal Reserve chair Jerome Powell to discuss the massive CARES Act stimulus package approved in late March, which includes loan facilities for large companies as well as the Paycheck Protection Program for smaller businesses.

In his prepared statement, Powell stressed that containing the virus and restoring confidence were key to the economic recovery, along with "policy actions taken at all levels of government to provide relief and to support the recovery for as long as needed."

Mnuchin said the administration will soon begin "to have conversations about supplemental relief legislation. We look forward to working with Congress on a bipartisan basis in July on any further legislation that may be necessary."

The secretary stressed data showing aid already released has helped spark a recovery, including creating 2.5 million jobs in May.

"While the unemployment rate is still historically high, we are seeing additional signs that conditions will improve significantly in the third and fourth quarters of this year," Mnuchin said. – AFP

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