Friday, June 25, 2010

Consumer sentiment in weak uptrend

The Reuters/University of Michigan Index of Consumer Sentiment showed a slight improvement at the end of June, rising from 75.5 in the middle of the month to 76.0.  The index is up 2.4 points from May.

Sentiment has been gradually improving over the past year, as the job market stabilizes and economic activity no longer declines.

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“The improvement was not because consumers now view the economy more favorably, but that any improvement, however small, was seen as a welcome development after the unprecedented economic recession,” according to the press release.

The survey also revealed that most “anticipate that the unemployment rate will remain largely unchanged through the balance of the year.”  Job insecurities and still-high layoffs seem likely to restrain consumer spending for much of the year.

Consequently, an acceleration in the rate of growth is unlikely.

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