(Bloomberg) — Consumer confidence rose more than forecast in June as Americans were the most upbeat about their wage prospects in seven years.
The University of Michigan preliminary consumer sentiment index increased to 94.6, topping all estimates in a Bloomberg survey of economists, from a final reading of 90.7 in May that was the lowest in six months.
Consistent labor-market improvement has helped buoy consumers’ attitudes even as costs at the gas pump rise from the cheapest rates since 2009. Further job gains and bigger paychecks should brighten moods and help underpin the household spending that makes up the largest part of the economy.
“The job market’s looking pretty good right now,” David Berson, chief economist at Nationwide Insurance in Columbus, Ohio, said before the report. “The trend should be upward. It’s quite likely that we’re going to see strong economic growth in the second half of the year.”
The median projection in a Bloomberg survey of 68 economists called for 91.2. Estimates ranged from 87.7 to 94. The gauge averaged 84.1 last year.
The Michigan sentiment survey’s index of expectations six months from now increased to 86.8 from 84.2 last month. The gauge of current conditions, which measures Americans’ views of their personal finances, rose to 106.8 in June from 100.8 a month earlier.
“The June data are consistent with a 3 percent annual growth rate in real personal consumption expenditures during 2015,” Richard Curtin, director of the Michigan Survey of Consumers, said in a statement. “The majority of consumers anticipated good times in the economy as a whole during the year ahead.”
Americans expected an inflation rate of 2.7 percent in the next year, down from 2.8 percent in May. Over the next five to 10 years, they also projected a 2.7 percent rate of inflation, compared with 2.8 percent in the previous month.
Measures of sentiment have been uneven as Americans adjust their outlook after the first-quarter growth slump.
The Bloomberg Consumer Comfort Index decreased to 40.1 in the period ended June 7, marking a record nine weeks of declines and the weakest since November, from 40.5 the prior week. Fewer Americans said now was a good time to make purchases, even as views of their personal finances improved.
The Conference Board’s consumer confidence index rose in May to 95.4 from 94.3 the prior month that was the weakest since December. More Americans viewed current economic conditions as favorable, according to the New York-based private research group’s data.