Consumer confidence hits six-year high on rising stock, home prices

WASHINGTON -- Americans are more optimistic about the economy than at any time since the Great Recession as rising home and stock prices boosted consumer confidence this month to a six-year high.

The consumer sentiment index from the University of Michigan and Thomson Reuters, released Friday, rose to 85.1 in July from 84.1 the previous month. It was the highest level since July 2007.

“The July survey suggests a growing resilience among consumers that will enable them to more easily withstand the cross-current inevitable in a slow-growth economy,” said Richard Curtin, the chief economist for the consumer survey.

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The new figure was “a robust sign that consumers expect the expansion to continue and act to speed up their buying plans.”

Risking values of stock portfolios and homes have bolstered consumer confidence in recent months, particularly among higher-income households, according to the survey.

Consumers said they were move favorable toward making purchases, including automobiles and homes. Those attitudes came even though the percentage of consumers who expected interest rates to increase was up in July.

About 68% of consumer said they expected interest rates to rise in the next year, up from 55% in June. Interest rates, including mortgages, have jumped in recent weeks as the Federal Reserve has indicated it soon could start reducing its stimulus efforts.

The prospect of higher interest rates lowered consumers longer-term view of the economy but accelerated their buying plans, the survey said.

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