US consumer confidence rose slightly this month, returning to near-record highs after a modest dip in May, according to a monthly survey released Tuesday.
Consumer sentiment about current conditions improved but hopes for quickening economic growth have dimmed, according to the Conference Board.
The closely-watched index rose 1.3 points to 118.9, defying the expectations of analysts who had predicted another slight decrease — partly in expectation of a hit from concerns over the FBI investigation into the Trump administration’s Russia ties.
All of June’s increase was in the Present Situation Index, which rose 5.7 points to 146.3.
“Expectations for the short-term have eased somewhat but are still upbeat,” Lynn Franco, the Conference Board’s economic indicators chief, said in a statement.
“Overall, consumers anticipate the economy will continue expanding in the months ahead, but they do not foresee the pace of growth accelerating.”
The share of survey respondents saying current conditions are “good” rose one percentage point to 30.8 percent while those saying they are “bad” fell 1.2 points to 12.7 percent.
The share of those saying jobs were “plentiful” also rose and those saying they were “hard to get” fell.
But consumers were slightly gloomier about the short term: those expecting business conditions to improve over the next six months fell 1.1 points to 20.4 percent. But those expecting them to worsen also fell a token 0.4 points to 9.9 percent.
Analysts agreed the confidence measures indicate consumer spending is poised to increase, even though optimism has slipped slightly.
“Americans are also more upbeat about future economic prospects since the November presidential election, but that optimism has diminished somewhat in recent months,” James Bohnaker, senior economist at IHS Markit, said.
However, “This report does not alter our consumer outlook. Looking ahead, the fundamentals for robust consumer spending are in place,” he said, forecasting three percent spending growth.
Ian Shepherdson of Pantheon Macroeconomics, who has been critical of the survey in the past, said high expectations are overstating the pace of consumption growth.
But even though “post-election euphoria is fading … modest declines in the expectations index are nothing to worry about.”
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