US consumer confidence improves in June

30 Jun 2015 | Author: | No comments yet »

Consumer Confidence Index in U.S. Increased to 101.4 in June.

WASHINGTON (AP) — Consumer confidence showed a solid gain in June following a modest increase in May, supporting the view that strong job gains are giving a boost to the overall economy. The Conference Board’s index advanced to a three-month high of 101.4, exceeding all projections in a Bloomberg survey, from a revised May reading of 94.6, the New York-based private research group’s report showed Tuesday. More confidence may help extend the recent rebound in spending and propel the world’s largest economy as global markets struggle to improve. “This is very encouraging because we very much need a strong consumer to carry this economy, at least in the near-term,” said Aneta Markowska, chief U.S. economist at Societe Generale in New York, whose forecast for 100 was among the closest in the Bloomberg survey. “We need a strong consumer to offset some of these drags emanating from abroad.” The gauge matched March as the second-highest level of sentiment since August 2007. In June, the labor market created 280,000 new jobs and economists believe job creation will top 200,000 when the July jobs report is released Thursday. The expectation is that stronger job growth will boost consumer confidence and lift consumer spending, which accounts for 70 percent of economic activity. “Over the past two months, consumers have grown more confident about the current state of business and employment conditions,” said Lynn Franco, director of economic indicators at the Conference Board. “Overall, consumers are in considerably better spirts and their renewed optimism could lead to a greater willingness to spend.” The economy went into reverse in the first three months of the year with the gross domestic product, the broadest measure of economic health, contracting at an annual rate of 0.2 percent.

The S&P/Case-Shiller index of property values climbed 4.9 percent in the 12 months ended in April after a 5 percent year-over-year gain a month earlier. A separate survey of consumer sentiment compiled by the University of Michigan that was released last week showed a gain to the highest reading since January.

The Bloomberg Consumer Comfort Index rose in the week ended June 21 by the most since the beginning of April as survey respondents took a more favorable view of the buying climate and their finances. The restaurant chain said on June 2 that its same-store retail sales climbed 4.5 percent in its fiscal quarter ended May 1. “The consumer is more confident, is facing lower gasoline prices, (and) a significantly better employment outlook, which is important for our middle-income consumer,” Lawrence Hyatt, chief financial officer, said at a June 23 consumer conference in Boston.

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