(Bloomberg) –Consumer confidence among American consumers in June eased from an almost one-year high as favorable views about personal finances were offset by concerns about the economy’s prospects, a University of Michigan survey showed on Friday.
Preliminary June index fell to 94.3 from 94.7 in May. Median projection in a Bloomberg survey of economists called for 94 Current conditions index, which takes stock of Americans’ views of their personal finances, climbed to 111.7, the highest since July 2005, from 109.9
Measure of expectations six months from now fell to 83.2 from 84.9 in May. Twas the best since June 2015.
Consumers see inflation over next five to 10 years at 2.3 percent rate, the lowest in records back almost a half century, after 2.5 percent in May. Consumers expect year-ahead inflation rate of 2.4 percent, the same as in May to match the lowest since September 2010
Consumers rated their current financial situation stronger than at any time since 2007, reflecting improved wage gains and low inflation that may encourage them to spend more and drive bigger gains in the economy. Conditions for the purchase of durable goods, such as automobiles, climbed to the highest level this year. The survey also showed a 10 percentage point decrease in net unfavorable responses to job creation, a sign May’s disappointing payrolls figure will prove temporary. Meanwhile, the decline in consumers’ long-term inflation expectations gives Federal Reserve policy makers room to hold the line on interest-rate increases.
The job market is “really the key to spending in the year ahead,” Richard Curtin, director of the University of Michigan consumer survey, said on a Bloomberg conference call. There were more upbeat attitudes about payroll gains in the coming months, he said.