WASHINGTON: US consumer confidence surged unexpectedly to an 18-month high in June, fuelled by an uptick in the outlook for family finances, according to survey data released Tuesday.
The surprise jump in confidence indicates consumers are feeling buoyant about their finances despite the US Federal Reserve’s aggressive campaign of interest rate hikes to tackle high inflation. The consumer confidence index rose to an 18-month high of 109.7 in June, up from a revised 102.5 in May, according to the Conference Board, a non-profit group.
“While income expectations ticked down slightly in June, new questions included in this month’s release found a notably brighter outlook for consumers’ family finances,” Dana Peterson, chief economist at the Conference Board, said in a statement.
“Around 30 per cent expect their family’s financial situation to be ‘better’ in the next six months, compared to less than 14 per cent expecting it to be ‘worse,’” she said.
“Greater confidence was most evident among consumers under age 35, and consumers earning incomes over $35,000,” she added.
Despite the rosy picture for June, the expectations gauge “continued to signal consumers anticipating a recession at some point over the next 6 to 12 months,” Peterson said.
The Fed paused its cycle of interest rate hikes earlier this month after 10 straight increases, but indicated that two more hikes were likely before the end of the year. Futures traders assign a greaterthan 75 per cent chance the US central bank will vote to raise its benchmark lending rate by a quarter percentage point at its next meeting on July 25-26, according to data from CME Group. – AFP
