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Consumer confidence pops to its highest since October

Pedestrians carry shopping bags through downtown San Francisco.
David Paul Morris | Bloomberg | Getty Images
Pedestrians carry shopping bags through downtown San Francisco.

Consumers were feeling more optimistic than expected in June as a key measure hit its highest level since October, according to a survey released Tuesday.

The Consumer Confidence Index hit 98 in June, The Conference Board said. Economists expected consumer confidence to hit 93.7, up from May's revised figure of 92.4, according to a Thomson Reuters consensus estimate.

The survey, a closely-followed barometer of consumer attitudes, measures sentiment toward business conditions, short term outlook, personal finances and jobs. Despite the spike in June's readings, consumers were still "cautiously optimistic" about economic growth in the short term, said Lynn Franco, director of economic indicators at The Conference Board.

"Consumers were less negative about current business and labor market conditions, but only moderately more positive, suggesting no deterioration in economic conditions, but no strengthening either," Franco said.

A larger share of consumers said that business conditions were good, rising to 26.9 percent from 26.1 percent, while only 17.7 percent observed bad business conditions in June, down from 21.4 percent, the survey said. More consumers also expected improvement over the next 6 months, with the share rising to 16.8 percent from 15 percent.

Still, fewer consumers said that jobs were "plentiful" in June, with the figure falling to 23.4 percent from 24.5 percent.

Rising to 98 after two modest monthly declines, June's figure is still identical to the 2015 average, wrote Jim O'Sullivan, chief U.S. economist at High Frequency Economics.

"The net result is little change recently, with levels high enough to be consistent with solid growth in consumer spending," O'Sullivan wrote in a research note.