American consumers are feeling better about the economy with one measure hitting its highest level since January.
The University of Michigan Index of Consumer Sentiment rose this month to 96.1, following a final May reading of 90.7 and the highest level since January when it was at 98.1.
The latest reading is also 16.5% higher than in June 2014, the biggest year-over-year gain since 2004
“Consumers voiced in the first half of 2015 the largest and most sustained increase in economic optimism since 2004,” said Surveys of Consumers Chief Economist Richard Curtin. “Just as important, that same record was set by households in the top third of the income distribution as well as by the middle third and those in the bottom third of the income distribution.”
More importantly, he said, the recent surveys recorded those same records when consumers were asked to evaluate prospects for the national economy, their personal finances, and buying conditions.
“Consumer spending will remain the driving force of economic growth in 2015. Overall, the data indicate growth in consumer spending of 3% in 2015,” Curtin said.
Consumers were also upbeat in their evaluation of current economic conditions as well as their future expectations, with both showing strong gains from the month before and a year earlier.
The sunnier feelings in the survey are not surprising with the results being released a day after a government report showed consumer spending increased in May by its biggest margin in nearly six years.