Despite sluggish economic growth and lingering high rates of unemployment, consumer sentiment in the United States reached its highest level in six years.
According to the Thomson Reuters/University of Michigan’s final reading, consumer sentiment in July came in at 85.1, a slight increase from 84.1 in June. It was the best reading for the index since July 2007.
The preliminary reading — announced earlier this month — on consumer sentiment was only 83.9. Economists polled by Reuters expected a final July reading of only 84.
During the last recession, the index averaged slightly above 64. In the five years before the financial crisis, it averaged almost 90. Consumer sentiment is one of the most popular measures of how Americans rate financial conditions and attitudes about the economy. The University of Michigan’s Consumer Survey Center questions 500 households each month for the index.
The reading on current economic conditions, which measures whether Americans think it is a good time to make large investments, jumped to 98.6 in July, compared to 93.8 in June. However, consumer expectations declined from 77.8 to 76.5 over the same period.
Richard Curtin, survey director, said in a statement, “This high level of confidence points toward a continued expansion of consumer spending in the year ahead.”
Despite the strong reading, stocks declined across the board. In morning trading, the Dow Jones Industrial Average dropped 75 points, while the S&P 500 dipped about 6 points. Consumer blue chips, such as Wal-Mart (NYSE:WMT) and Coca-Cola (NYSE:KO), declined 0.75 percent and 1.4 percent, respectively.
Don’t Miss: Do Americans Believe in the Economic Recovery?
Follow Eric on Twitter @Mr_Eric_WSCS