The University of Michigan’s index of consumer sentiment rose from 68.7 in May to 70.8 in June, raising hopes that the world‘s largest economy is picking up.
June’s figure of 70.8 represents the highest level since February 2008 and is the fourth consecutive rise this year.
Meanwhile, the Commerce Department reported that US consumer spending, which makes up for two thirds of domestic economic activity, rose 0.3% in May.
According to Mark Vitner, an economist at Wachovia: “This confirms our forecast that the economy is going to move into positive territory in the third quarter.”
Other good news came as it was reported that households’ savings hit their highest level for over a decade and a half, as a result of the country’s economic stimulus package. The savings rate reached 6.9% - the highest rate since December 1993.
The news also follows on from the Commerce Department’s report last week that showed gross domestic product (GDP) fell by an annualised rate of 5.5% in the first three months of 2009.
The figures were much better than previously thought and follow a 6.3% fall in the final quarter of 2008 and a fall of 0.5% in the third quarter of 2008.
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