U.S. consumer confidence held steady at 97.3 in June
U.S. consumer confidence held steady in July and new single-family home sales hit their highest level in nearly 8-1/2 years in June, suggesting sustained momentum in the economy that could allow the Federal Reserve to raise interest rates this year.
Other data on Tuesday showed moderate gains in house prices in May, which should support consumer spending and keep home purchasing affordable, especially for first-time buyers who have started venturing into the housing market.
The reports joined a slew of data, ranging from retail sales to manufacturing and services sector surveys, in painting a bright picture of the economy, and came as the Fed started a two-day policy meeting. The U.S. central bank is not expected to increase rates on Wednesday.
“The upbeat tone of these reports will offer further encouragement to the Fed,” said Millan Mulraine, deputy chief economist at TD Securities in New York. “And while we do not expect any change from the Fed’s current wait-and-see mode, the resiliency in household sentiment will underpin their confidence in eventually putting rate hikes back on the table.”
The Conference Board said its consumer index was 97.3 this month after a reading of 97.4 in June. Economists had expected the index to drop to 95.9 in July.
The largely unchanged reading followed Britain’s stunning vote last month to leave the European Union, which rattled global financial markets and led to a dip in other consumer sentiment measures.
The survey’s so-called labor market differential, which closely correlates to the jobless rate in the employment report, improved this month after slipping in June.
“This report should be viewed as a lens through which to see the labor market and, along with the July readings on initial jobless claims, it continues to signal solid improvement in the employment situation,” said John Ryding, chief economist at RDQ Economics in New York.
HOUSING BOOSTA recent rally on Wall Street, strengthening U.S. labor market and lower gasoline prices are supporting consumer confidence, helping to underpin economic activity.
