U.S. consumer confidence index rises in July, consumer spending likely to have risen in Q2

The U.S. Conference Board’s index of consumer sentiment rose in July, against consensus expectations of a modes drop. The consumer confidence index rose to 121.1 in July, as compared with consensus expectations of 116. The present situation index rose to 147.8 from 143.9 and the consumer expectations measure rose to 103.3 from 99.6. The labor market differential, which gauges the net share of consumers that see employment as plentiful, rose to 16.1, its highest since August 2001, and indicates towards continued strength in labor markets.

Household sentiment continues to rebound steadily drive by buoyant confidence about both the current situation and prospects about the future. This is viewed as further confirmation that U.S. household sector is on strong footing and the first quarter weakness in consumer spending is expected to be transitory, noted Barclays in a research report.

U.S. consumer spending is likely to have risen 3 percent sequentially in the second quarter. Moreover, further rebound in the labor market and aggregate income is expected to keep consumer confidence at strong levels in the months ahead, added Barclays.

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