Consumer Confidence Up, Inflation Contained
U.S. consumers were more positive about the economy and their own finances in July than at any time since 9/11, the Conference Board said Tuesday (July 31).
CBS MarketWatch reported that the consumer confidence index rose to 112.6 from a revised 105.3, ahead of expectations of a gain to 106.0.
The present situation index rose to 139.2, also the highest since August 2001, from 129.9 in June, while the expectations index rose to 94.8 from 88.8.
“An improvement in business conditions and the job market has lifted consumers’ spirits in July,” said Lynn Franco, an economist for the private research organization. “This rebound in confidence suggests economic activity may gather a little momentum in the coming months.”
Falling gasoline prices may have played a part. Consumers said they expected an inflation rate of 5.1% over the next year, down from 5.4% expected in May and June.
In a separate report, the Commerce Department said that core consumer inflation increased 0.1% for the fourth consecutive month in June, pushing the yearly gain in core inflation down to the lowest level in three years.
The core personal consumption price index rose 1.9% in the past year, the lowest inflation since early 2004, and just within the Federal Reserve’s unofficial comfort zone of 1% to 2% for core inflation.
Core inflation excludes volatile food and energy prices. Overall inflation also increased 0.1% in June, the lowest monthly inflation since November. Overall inflation is up 2.3% in the past year.
Overall inflation also increased 0.1% in June, the lowest monthly inflation since November. Overall inflation is up 2.3% in the past year.