US consumer sentiment continued to improve through the end of June, while short-term inflation expectations held at a more than two-year low.
The University of Michigan’s consumer sentiment index climbed to 64.4 from a preliminary reading of 63.9, according to the final June reading out Friday. That marked a rebound from a May slump.
Consumers expect prices will climb at an annual rate of 3.3% over the next year, matching the preliminary reading. They see costs rising 3% over the next five to 10 years, the data showed.
“Overall, this striking upswing reflects a recovery in attitudes generated by the early-month resolution of the debt ceiling crisis, along with more positive feelings over softening inflation,” Joanne Hsu, director of the survey, said in a statement.
The pickup in sentiment follows weaker-than-expected May consumer spending data. From February through May, household spending essentially stalled after an early-year surge, a Commerce Department report showed earlier. Key inflation metrics also softened.
Hsu noted in the report that uncertainty over both short- and long-term inflation expectations have declined “considerably.” Fewer consumers said they expect extremely high or low inflation in the future.
The University of Michigan report showed buying conditions for durable goods increased in June to an almost two-year high. However, consumers remained downbeat about their personal finances.
The current conditions gauge increased to a four-month high of 69. A measure of expectations rose to 61.5, also the highest since February.
--With assistance from Jordan Yadoo.
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