Consumer sentiment improved in June as higher stock prices and an improving labor market helped bolster Americans' views of the economy.
The Thomson Reuters/University of Michigan’s final sentiment index climbed to 82.5 from 81.9 in May. Economists surveyed by Bloomberg projected an increase to 82 after a preliminary June reading of 81.2.
More employment opportunities, record stock prices and improved property values are giving consumers cause for enthusiasm attitudes, reducing the odds that consumers will retrench. At the same time, Americans are paying more at gas pumps and grocery-store checkout lines, underscoring the need for bigger wage gains.
“Confidence is fairly upbeat on the part of the consumer, simply because their two major components of wealth -- the stock market and the value of homes -- are doing better,” said Chris Rupkey, chief financial economist at Bank of Tokyo-Mitsubishi UFJ Ltd. in New York, said before the report.
Estimates of the 57 economists in the Bloomberg survey ranged from 80.8 to 83. The index averaged 89 in the five years before December 2007, when the last recession began, and 64.2 in the 18-month contraction that followed.
The Michigan sentiment survey’s index of current conditions, which measures Americans’ views of their personal finances, increased to 96.6 this month from 94.5 in May. The preliminary reading was 95.4.
The gauge of expectations six months from now was little changed at 73.5 after 73.7 the prior month. The initial reading was 72.2 for June.
Other measures of consumer sentiment have improved this month. The Conference Board’s index climbed to 85.2, the strongest reading since January 2008, from 82.2 in May, the New York-based private research group reported earlier this week.
The Bloomberg Consumer Comfort Index last week held near its 2014 high as views on the economy were the second-strongest since 2008.
Better job prospects are a bright spot for consumers. Payrolls increased by 217,000 in May after a 282,000 gain in April, according to Labor Department data. It marked the fourth straight month employment climbed by more than 200,000, the first time that’s happened since early 2000.
Demand has been strong enough to reduce the number of dismissals. Jobless claims last week fell to a one-month low, the Labor Department said yesterday. Firings are hovering just above their pre-recession lows as companies grow confident the economy will snap back from the worst contraction in five years.