U.S. consumer confidence surged in June as consumers expressed optimism that the weak first-quarter growth was mainly due to harsh winter weather, data released on Friday showed.
The Thomson Reuters/University of Michigan’s full reading for June on consumer confidence stood at 82.5, compared to 81.9 a month earlier. This also contrasts favorably against the preliminary figure of 81.2 and market forecast of 82.0.
“Consumers believe the first quarter decline in economic activity was due to the harsh winter weather, and that the economy has already returned to positive economic growth,” said survey director Richard Curtin, as quoted by Reuters.
The index of current economic situation grew from 94.5 to 96.6, beating the prediction of 96.0. The index of consumer expectations fell to 73.5 from 73.7, also surpassing the forecasted 72.8. The one-year inflation forecast fell from 3.3 percent to 3.1 percent, while the 5-10 year inflation prediction grew to 2.9 percent from earlier estimate of 2.8 percent.
In contrast, a separate report showed that consumer sentiment in the euro zone plunged in June over concern that the ongoing Iraqi fighting may send the crude oil prices soaring, and that the Ukraine tensions may weigh on the bloc’s growth.
The European Commission’s economic sentiment index (ESI) for the euro area plunged to 102.0 from May’s revised reading of 102.6. The decline in confidence in construction and industry, and by consumers was the main factor for the drop.
The Brent crude prices have declined almost $3 from the nine-month peak of $115.71 touched on June 19 as it became apparent that oil production in the southern region, which contains most of the oil wells, won’t be affected by the violence that is mainly concentrated in the northern region of the country. To register for a free 2-week subscription to ForexMinute Premium Plan, visit www.forexminute.com/newsletter.
To contact the reporter of this story; Jonathan Millet at email@example.com