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US consumer confidence surges to five-year high

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(Globalpost/GlobalPost)

Consumer confidence in the United States surged to a five-year high in June, besting analyst expectations by a wide margin, the Conference Board said on Tuesday.

Consumer confidence stood at 81.4 in June, up from the revised 74.3 in May and well above the 75 forecast by analysts.

The June figure represents the third straight monthly increase and takes the index to its highest level since January 2008, the Conference Board said.

"Consumers are considerably more positive about current business and labor market conditions than they were at the beginning of the year," said Lynn Franco, director of economic indicators at the Conference Board.

"Expectations have also improved considerably over the past several months, suggesting the pace of growth is unlikely to slow in the short-term, and may even moderately pick up."

Most of the report's vectors pointed in a positive direction. Consumers who see jobs as "plentiful" increased to 11.7 percent from 9.9 percent, though those claiming jobs are "hard to get" also rose to 36.9 percent from 36.4 percent.

Consumers expecting business conditions to improve over the next six months increased to 20.3 percent from 18.7 percent, while those expecting business conditions to deteriorate fell to 11.4 percent from 12.2 percent.

"Consumers are confident and that is leading to purchases of big-ticket items and more business investment," said Joel Naroff chief economist of Naroff Economic Advisors, an economic consultancy.

But Naroff did see one point of concern: a drop in expectations for income growth in the next six months to 15.2 in June from 15.6 in May and 16.8 in April.

During that period, the index also showed a drop in expectations for declining income during this period, but a rise in expectations for income to remain the same.

"The only way the rise in confidence turns into long-term consumption gains is if income growth accelerates," Naroff said.

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http://www.globalpost.com/dispatch/news/afp/130625/us-consumer-confidence-surges-five-year-high