Beating Expectations, Michigan Survey Finds Consumers Upbeat – Real Time Economics

Customers shopped at a Dollar General store in May. Consumers are less worried about the economy, a survey out Friday finds, although real consumer spending fell in May.

U.S. consumers are less worried about the economy as June draws to a close, according to one survey of households released Friday.

The Thomson-Reuters/University of Michigan final June sentiment index increased to 82.5 from an unexpectedly weak preliminary reading of 81.2 and a final-May reading of 81.9, according to an economist who has seen the numbers.

The end-June reading is better than the 81.9 reading expected by economists surveyed by The Wall Street Journal but still below the recent high of 84.1 posted for April.

This month’s final current conditions index advanced to 96.6 from an early-June reading of 95.4. The expectations index rose to 73.5 from 72.2.

According to Friday’s sentiment readings, along with Tuesday’s Conference Board confidence index, households are feeling better about the economy and labor markets.

Still, that view is not translating to faster spending. Real consumer spending in May fell 0.1%. One reason is that more money is going to paying for costlier staples such as gasoline and food.

Indeed, according to the Michigan survey, inflation expectations edged higher at the end of June.

The one-year inflation expectations reading at the end of June rose to 3.1% from the preliminary reading of 3.0%. Inflation expectations covering the next five to 10 years held at 2.9%, which was up from 2.8% at the end of May.



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