The Conference Board's Consumer Confidence Index spiked to 135.7 in July and appears headed for an all-time high as employment confidence continues to increase.

The Trump administration can celebrate the Consumer Confidence Index jumping by a huge 9.4 points from its 124.3 reading in June, driven by a big 14.3-point upside spike in the Expectations Index, which  measures consumers' short-term outlook for income, business, and labor market conditions.

The current 135.7 July reading compares to a 59.2 reading after the same two and a half years of the Obama administration.  The Index plunged to an abysmal 40.9 in October 2011 and never recorded a higher reading than 103.8 for Obama.  

The Index is a monthly survey that scientifically measures consumer expectations in percentage increases and decreases from a 1985 base reading of 100 during the Reagan administration.  Over the last four decades, the Index averaged 96, reflecting a protracted period when "real" (after-inflation) middle-class incomes fell by 11.5 percent.  

Senior director of economic indicators Lynn Franco highlighted that despite the escalation in trade and tariff tensions that dragged down confidence in June, the Index rebounded to hit its highest level in 2019.  She stressed:

Consumers are once again optimistic about current and prospective business and labor market conditions. In addition, their expectations regarding their financial outlook also improved. These high levels of confidence should continue to support robust spending in the near-term despite slower growth in GDP.

U.S. consumers' assessment of present-day conditions improved in July with an increase from 37.5 to 40.1 percent voicing that business conditions are "good" and only a slight increase from 10.6 to 11.2 percent of those voicing business conditions are "bad."  Consumers' claims that jobs are "hard to get" plunged to 12.8 from 15.8 percent, while those claiming that jobs are "plentiful" increased from 44.0 to 46.2 percent.

Consumers are becoming more optimistic regarding the future, with those expecting business condition improvements over the next six months increasing from 19.1 to 24.0 percent, while those expecting worse conditions declined from 12.6 to 8.7 percent.

Consumers are also more optimistic regarding the future for jobs and incomes.  The Conference Board found that over the next six months, consumers expecting more jobs increased from 17.5 to 20.5 percent, while those anticipating fewer jobs shriveled from 13.9 to 11.5 percent.  That confidence in rising job demand is driving consumers' income expectations for the next six months, with those expecting increases jumping from 20.5 to 24.7 percent, while those expecting declines fell from 7.5 to 6.3 percent.

Wall Street economists consistently overestimated consumer confidence during the Obama administration and have dramatically underestimated consumer confidence during the Trump administration, as evidenced by their mid-July 2019 forecast of 125.0.

The big miss is associated with Wall Street expectations that the strong Trump administration's economy would cause inflation to spike higher and the Federal Reserve to raise interest rates and stifle growth to prevent a so-called economic overheating.

But as the U.S. Federal Reserve's policy-making "Open Markets Committee" begins its two-day meeting on July 30 and 31, the core personal consumption expenditures index the "Fed" watches to monitor inflation trends is at a below target level of 1.6 percent.  That is about the same level as two and a half years into the Obama administration, when consumer confidence was plunging to a near record low.