US CONSUMER confidence rose to a nine-month high in June, a survey showed yesterday, but inflation gauges showed worrisome signs of price increases that could slow any recovery.
June’s consumer confidence reading failed to surpass the level reached last September.The Reuters/University of Michigan Surveys of Consumers said its preliminary index of confidence for June rose to 69.0 from May’s 68.7. That was slightly below economists expectations of a 69.5 reading, according to a Reuters poll.
For the third straight month, the overall consumer sentiment reading was at its highest since last September’s 70.3.
It’s good news but not great news, Hugh Johnson, chief investment officer at Johnson Illington Advisors in Albany, New York, said of the June confidence data.
“So the basic message is that sentiment is improving and thats good news. We’d like it to have been better but it wasn’t, so be it.”
On Wall Street, stocks extended their losses after the publication of the somewhat weaker than expected reading on consumer confidence.
In a worrying development, inflation readings in the consumer sentiment data and a separate report on import prices revealed potential price pressures at a time when the economy appears to be on track for recovery from the worst recession in decades.
US import prices rose 1.3 per cent in May, the Labor Department said, but the gain was powered by petroleum prices and underlying import price pressures were more muted.
Analysts had forecast import prices would rise 1.3 per cent after a revised 1.1 per cent rise in April, previously reported as a 1.6 per cent increase. May’s gain was the largest since a 1.4 per cent advance in July 2008.
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