U.S. consumer confidence surges
Consumer confidence across the continental United States surged in June, thanks to expected increases in household income and low inflation, according to the monthly consumer sentiment survey conducted by the University of Michigan and Thomson Reuters.
The widely watched index registered a 94.6 in its preliminary reading for June, surpassing the market expectations of 91.5 from analysts polled by Yahoo Finance.
The index advanced 4.3 percent over May’s reading of 90.7, and rose 14.7 percent from a reading of 82.5 in June 2014. While the index for current conditions registered a reading of 106.8, up 10.6 percent over last June, consumers’ expectations for the months ahead surged even higher, up 18.1 percent to a reading of 86.8, according to survey data.
Overall, the June data are consistent with a 3 percent annual growth rate in real personal consumption expenditures during 2015, the survey’s chief economist, Richard Curtin, said in a statement.
Curtin also said expectations of rising interest rates is helping consumers to view current rates as “attractively low, but it has not yet prompted the belief that it would be better to borrow in advance of future (rate) increases.”
Curtin said “stabilizing” consumer demand at the levels it expects for the rest of the year would require a “very slow pace of small rate hikes.” Anything faster would have to be fueled by a resurgence in advance borrowing, such as for real estate or new cars, he added.
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