Consumer Confidence Jumps in June
U.S. consumer confidence continued to rise in June's numbers, hitting its highest level since February 2008.
This means that consumers think the economy is better than it was, which is true. Consumers also ratcheted back their expectations for the future, which is smart.
The Reuters/University of Michigan Surveys of Consumers said today its final index of confidence for June rose from 68.7 in May to 70.8 in June, beating economists' expectations.
Even though the current-conditions index rose in June, the index of consumer expectations -- how consumers see coming months -- stayed essentially flat, down to 69.2 in June from 69.4 in May.
Here's why: Unemployment, now at 9.4 percent, probably will continue to rise, possibly hitting 10 percent by the end of the year, as joblessness is a lagging indicator of an economy's health. This means more mortgage foreclosures, more credit card defaults and probably more government stimulus spending.
So even though the worst might -- MIGHT -- be over, don't expect to be singing "Happy Days Are Here Again" anytime soon.
The consumer confidence index hit a November 2008 low of 55.3.
"Such a sizable gain has usually indicated that an end to the economic downturn is on the horizon, as consumers begin to increase their spending on houses, vehicles, and large household durables," the survey's authors said in a statement.
June 26, 2009; 1:50 PM ET
Categories: The Ticker | Tags: consumer confidence
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