U.S. consumers became more confident in June —with more Americans pleased by current conditions but slightly less hopeful about what the next six months hold.
The Conference Board, a business research group, said Tuesday that its consumer confidence index rose to 118.9 this month from 117.6 in May. The gains suggest that many Americans expect the economy to keep expanding, although the pace of growth is unlikely to accelerate much.
More consumers described current business conditions as "good" and jobs as "plentiful." The upbeat results may reflect the robust 4.3 percent unemployment rate. But fewer of them expect business conditions to improve over the next six months relative to the survey results in May.
Economists closely monitor the mood of consumers because their spending makes up about 70 percent of U.S. economic activity. Measures of consumer sentiment began to climb after Donald Trump was elected president in November, but the stronger confidence hasn’t led to dramatically higher spending so far.
Andrew Hunter, U.S. economist at Capital Economics, said that consumer confidence is at a “very healthy level” but it’s “beginning to look a little suspect” given other indicators.
Retail sales in May fell by the most in 16 months, as spending at gasoline stations, department stores and electronics stores declined. The growth rate in spending at restaurants and bars has declined in recent months as well.
Weaker consumer spending early this year is a key reason why the economy expanded at only a lackluster 1.2 percent annual pace from January through March.