Hopes that the economy could avoid a downturn in the near-term were also bolstered by other reports on Tuesday signaling a housing market revival was likely underway, with new home sales racing to a 15-month high in May and monthly house prices rising again in April.
The Conference Board said its consumer confidence index rose to 109.7 this month, the highest reading since January 2022, from 102.5 in May. Economists polled by Reuters had expected the index to climb to 104.0. The survey's so-called labor market differential, derived from data on respondents' views on whether jobs are plentiful or hard to get, rose to 34.4 from 30.7 in May, a sign labor market conditions remain tight despite first-time applications for state unemployment benefits hovering at more than 1-1/2-year highs. This measure correlates to the unemployment rate in the Labor Department's closely followed employment report.
Though a downward revision to April's increase to 0.6% from 1.3% took some of the shine from the data, business spending was holding up despite the pain from higher borrowing costs. There were notable increases in orders for electrical equipment, appliances and components as well as machinery.