BUSINESS

University of Michigan: Consumer sentiment rises this month to highest level since January

06/26/2015 10:22 EDT | Updated 06/26/2016 05:59 EDT
WASHINGTON - Consumer sentiment rose this month to the highest level since January, suggesting that spending will strengthen this year.

The University of Michigan says its consumer sentiment index rose to 96.1 this month from 90.7 in May. The June reading was the highest since January's 98.1. The index is up from 82.5 a year ago.

For the first six months of 2015, consumer optimism improved at the fastest pace since 2004, three years before the Great Recession, said Richard Curtin, chief economist for the Michigan survey.

Curtin says the readings are consistent with a 3 per cent increase in consumer spending this year. That would be the fastest pace since 2006. The Commerce Department reported this week that consumer spending rose at an annual pace of 2.1 per cent from January through March.

"An improving economy was the most important component," Curtin said.

Americans at all income levels registered improving optimism.

The optimism reflects a strong job market. Employers have been adding jobs — nearly 3.1 million over the past year — at a pace not seen since the boom years of the late 1990s. Unemployment stood at 5.5 per cent in May, down from 6.3 per cent a year earlier. Wages have been slower to improve.