אויף אזאנס האב איך זיך נישט געראכטן

Confidence index reaches 3-year high

Bloomberg News
Published June 29, 2005


NEW YORK -- Consumer confidence rose in June to the highest level in three years as an improving labor market and rising incomes outweighed higher energy prices, according to a private survey released Tuesday.

The Conference Board's index of consumer sentiment increased to 105.8, higher than forecasts of 104, from 103.1 in May. Americans were more satisfied with their current financial situations than at any time since the September 2001 terrorist attacks, the New York-based research group said.

"These numbers are consistent with solid growth in consumer spending," said James O'Sullivan, a senior economist at UBS Securities LLC in Stamford, Conn. "The ups and downs in oil prices haven't really affected consumer spending all that much."

The percentage of consumers expecting their incomes to rise was 19.4, the highest this year, even as gasoline prices neared a record. The increase suggests spending will hold up and that the economy isn't in danger of stalling, a reason why economists expect the Federal Reserve to raise its target interest rate to 3.25 percent from 3 percent later this week.

"Another strong month of consumer spending data would suggest that things aren't likely to change much for the Fed," said Stephen Stanley, chief economist at RBS Greenwich Capital in Greenwich, Conn.

The present situations index increased to 120.7, the highest since September 2001, from 117.8. The expectations index rose to 95.8 from 93.4.