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Consumer confidence climbs in June

U.S. consumer sentiment rose in June, with some feeling the economy is back on track after several years of stumbling, according to a survey on Friday.
/ Source: Reuters

U.S. consumer sentiment rose in June, according to a survey on Friday, on improved job prospects and a softening in soaring gasoline prices as the economy gained traction after a long period of weakness.

The University of Michigan’s final survey of consumer confidence for June showed its sentiment index rose to 95.6 from a reading of 90.2 in May, according to sources who saw the subscription-only report.

Economists polled by Reuters had forecast a rise to 95.5 with increased optimism due to an improved employment picture, a generally healthy economy and a moderate decrease in the record gasoline prices seen in late May.

The U.S. average retail gasoline price has eased about 6 percent as of late June from a record high of $2.054 per gallon on May 26, according to AAA, the U.S. motorist group.

“It was a bit surprising in the first place when initial June sentiment rose as much as it did from May,” said Steven Wieting, senior economist at Citigroup in New York.

“To see confidence rise in a period where gasoline prices were moving up, the international and political news has not been confidence-building, for them to cite improvement in the labor market and income conditions is a pretty interesting sign,” he said.

The expectations index rose to 88.5 in June from 81.6 in May, most likely in line with the pickup in the jobs market over the past few months.

The current conditions component rose to 106.7 from 103.6.

Despite the rise in June sentiment, analysts have said sentiment continues to be hobbled by concern about the conflict in Iraq and the looming June 30 handover to an Iraqi-run government from the U.S.-led administration.