1 of 2 | The Conference Board found consumer confidence is on the rebound, though there may be some apprehension on big-ticket items such as cars and homes. File Photo by John Angelillo/UPI |
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June 27 (UPI) -- The U.S. consumer is feeling confident about hiring, overall economic conditions and wage growth, results published Tuesday by The Conference Board suggest.
"Consumer confidence improved in June to its highest level since January 2022, reflecting improved current conditions and a pop in expectations," said Dana Peterson, the chief economist at The Conference Board, a business research organization that tracks economic indicators.
Consumer-level prices are moderating, and recent trends at the wholesale level suggest a pressure release is coming. So-called core inflation, which strips out volatile items such as food and energy, was up 5.3% over the 12-month period to May.
While that's far above the 2% target rate set by the Federal Reserve, inflation is close to half as low as the peak last year.
Peterson said the U.S. consumer in June reported "sunnier views" on employment prospects in particular. In terms of wages, about 30% of those taking part in the survey said they expected to be better off six months from now, compared with 14% who said they expected to be worse off.
"This might reflect consumers' belief that labor market conditions will remain favorable and that there will be further declines in inflation ahead," she said.
Renewed confidence, however, could create headaches for policymakers at the Federal Reserve working to bring consumer-level inflation closer to its target rate. The Fed this month opted to keep its lending rates stable but said that at least two more hikes may be necessary to cool the economy even further.
Parts of the U.S. economy, the world's largest, are showing signs of a slowdown. Recent data on housing showed prices were up for the third month in a row into April, but down from the same period last year.
Peterson added that plans to purchase items such as a new car or home have slowed down from the surge seen at the beginning of the year.
"This may reflect rising costs to finance big-ticket items as the Fed continues to raise interest rates," she said.