US consumer confidence jumped to a nearly one-and-a-half-year high in June as the economy reopened and job market optimism rose, which offset concerns about rising inflation. The survey released by the Conference Board on Tuesday also showed that consumers have a strong willingness to buy goods such as automobiles and home appliances.
Consumers are also keen to buy houses, which shows that due to lagging supply, housing prices will continue to rise rapidly. Many people plan to go on vacation in the next six months, mainly in the United States, which should boost demand for services and stimulate consumer spending.
RubeelaFarooqi, the chief US analyst at High-Frequency Economics, said that consumer confidence is likely to benefit due to the ongoing resumption of work and production, along with the improvement of public health conditions in the future, which will become a good asset to support employment growth and income in the coming days.
The World Enterprise Research Institute’s consumer confidence index rose sharply from 120.0 in May to 127.3 in June, the highest level since February 2020. Economists interviewed previously predicted the index to be 119.0. The survey puts more emphasis on the labor market that is steadily recovering. More than 150 million Americans have been fully vaccinated with the new corona vaccine, which has created conditions for a broader economic restart.
The survey based on consumers’ assessment of current business and labor market conditions, the status quo index rose to 157.7 from 148.7 last month. The consumer expectations index rose from 100.9 to 107.0. Consumers’ inflation anticipation for the coming 12 months increases to 6.7% from 6.5% last month.
Another report released on Tuesday showed that the S&P/Case Shiller composite house price index, which covers 20 major cities, increased by 14.9% year-on-year in April, the largest increase since December 2005. The increase in March was 13.4%. Another report confirmed that house prices had risen sharply. The Federal Housing Finance Agency (FHFA) report shows that the house price index set a record increase of 15.7% in April after rising 14.0% in March. Economists do not think that another real estate bubble is forming. They point out that the surge in housing prices is mainly caused by imbalances in supply and demand rather than the bad lending behavior that triggered the 2008 global financial crisis. But the rapid rise in house prices may increase inflation. After the data was released, the U.S. stock market generally rose. The dollar widened and grew further against a bunch of other currencies.