Confidence of Consumers Goes Up Sharply in June

Consumer confidence--a key factor in economic growth--jumped in June to its highest level since the end of the Gulf War, according to economists who subscribe to a private survey released Tuesday by the University of Michigan.

The private report, used by the government to help gauge future growth trends in the economy, showed that consumer sentiment rose to 82.1% in June from 78.3% in May. The index measures consumer optimism about the present and future state of the economy.

Consumer sentiment was the highest since March’s 87.7%, when there was a burst of euphoria after the allied victory in the Gulf War.

Excluding the March blip, the index was at its highest since August, 1990--a month after the recession began.

“Confidence is now in a range where we can see a revival of consumer spending and a revival in the economy,” said David Wyss, an economist at DRI/McGraw-Hill Inc.

The survey works from a base of 100% in 1966, economists said, and is compiled through a telephone survey of 500 households.

The University of Michigan releases the study to paying subscribers. Researchers at the university could not be reached for comment.

Consumer feelings about the economy are closely studied by economists for any change in sentiment could signal a coming burst in spending or a possible fall.

Consumers buy two-thirds of all goods and services produced in the economy, so any sharp change could be an important factor in an overall rebound.