US consumer confidence rises to highest level since October

WASHINGTON – U.S. consumer confidence rose this month to the highest level since October.

The Conference Board reported Tuesday that its consumer confidence index rose to 98 in June from 92.4 in May, snapping a two-month losing streak. The survey measures how consumers assess current conditions as well as their outlook for the next six months.

Americans view of current conditions was the most positive since September. Their expectations for the future also grew sunnier as did their outlook for the strength of the job market.

The survey was conducted before Britain voted last Thursday to leave the European Union in a move that has shaken global financial markets and raised uncertainty about the prospects for the global economy.

Economists monitor confidence surveys because consumer spending accounts for about 70 per cent of U.S. economic activity.

“The underlying fundamentals for the consumer have been quite positive in recent months, as unemployment is low, incomes are rising at a solid pace, energy costs are below recent-year norms, borrowing costs are miniscule, and balance sheets are generally clean,” Stephen Stanley, chief economist at Amherst Pierpont Securities wrote in a research note.

Still, other measures of consumer spirits have been mixed. The University of Michigan’s index of consumer sentiment slipped this month. And the Commerce Department reported Tuesday that consumer spending rose at a 1.5 per cent annual pace from January through March, the slowest in two years.

The American economy grew at an unimpressive 1.1 per cent pace in the first quarter. And hiring growth stalled this spring, even though unemployment fell last month to the lowest level since November 2007.