Consumer confidence in the economy rose in June to a new 29-year high, as Americans remained optimistic that the strong labor market and healthy economic growth will continue in coming months.
The Conference Board reported Tuesday that its index of consumer confidence rose from a revised 136.3 in May to 137.6 in June, a larger rise than Wall Street analysts had expected.
June's gain pushed the index above the 29-year high of 137.4 set in February. The last time it was higher was the 137.9 reached in June 1969.
"Despite continuing turmoil in Asia and growing questions about the strength of the stock market, consumer confidence continues to top year-ago levels," said Lynn Franco, associate director at the Conference Board, a New York-based private research group.
"The strong American job market continues to fuel consumer optimism, with little let-up in sight," Franco added.
Consumer sentiment is important because consumer spending accounts for two-thirds of the nation's overall economic activity.
The report comes as economists scour new data for signs pointing to the direction of the economy and any inflationary pressures, and as Federal Reserve inflation fighters begin two days of meetings in Washington to review interest rate policy.
Even though the economy has shown considerable strength eight years into an expansion, there has been little sign of a rekindling of inflation. The Fed was not expected to raise interest rates at this week's meeting to cool economic growth, especially because of fears that such action would deepen Asia's already serious financial problems.
The consumer confidence index, calculated since 1985 from a base of 100, is derived from responses to questions sent to 5,000 households nationwide. The survey polls consumers on matters ranging from job availability to buying plans.
Consumers continued to feel confident about the current economic situation, boosting the index that measures feelings about present conditions slightly in June, a rise of 0.2 point to 170.9.
More consumers said that jobs were plentiful now and fewer said that they had trouble finding employment.
Consumers in June also regained their confidence about the outlook for the next six months, which had declined in May. The expectations index rose 1.9 points to 115.2.
But fewer consumers did say they were planning to buy a home or purchase a major appliance in the next six months. Fewer also said they were planning a family vacation.
Those that live in the northern Midwest, Southeast, and mountain region of the country were most confident in the economy, while those living in the Middle Atlantic states were least confident.
Written by Rachel Beck