A final reading of a measure U.S. consumer confidence in June came in at 84.1, a slight dip from May’s near-six-year high of 84.5, according to data released Friday by the University of Michigan and Thomson Reuters.
“Consumers now believe the recovery has achieved an upward momentum that will not be easily reversed,” said Richard Curtin, the survey’s chief economist. “Consumers anticipate continued slow economic progress.”
The final revision for June is a small improvement from earlier readings that put the number at around 82.7. Many analysts had expected a print of 83.
Rising stocks and increasing home prices helped keep the numbers steady.
“[H]ousehold wealth was the main reason consumers stayed optimistic,” the Associated Press reports. “Households with income above $75,000, those more likely to own homes and stocks, reported the biggest gain.”
“More Americans said they planned to buy a home, despite rising mortgage rates. The number of consumers who said it was a bad time to buy a home fell to the fewest in 10 years,” the report adds.
Because consumer spending accounts for roughly 70 percent of economic growth, changes in consumer sentiment can have a direct effect on stocks. Markets weren’t exactly thrilled with the consumer sentiment report:
Elsewhere, the UMich gauge of consumers’ views on current conditions “fell to 93.8 in June from 98 in May,” MarketWatch reports. “Meanwhile, a barometer of consumers’ expectations rose to 77.8 from 75.8.”
“On housing, it seems there hasn’t been too much damage to consumer sentiment from recent gains in rates. The fewest consumers in 10 years said this month that it’s a ‘bad time to buy a home,’ while the most respondents since 2006 said selling conditions are favorable,” the report adds.
Despite the fact that an increase in home prices has led to an increase in household wealth, economists explain consumption spending hasn’t been on par with past market rebounds for one simple reason: owners are mindful of the market’s volatility are they’re not taking big chances.
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