Consumer Sentiment Rises on Improved Jobs Outlook

Consumers across the U.S. are feeling more optimistic as the economy reopens, a new survey finds.
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American consumers are looking up after last week's surprising jobs report, with big gains in a widely watched measure of economic sentiment around the country.

The University of Michigan's consumer-sentiment index posted its biggest gain in four years, hitting 78.9 in June, a 9.1% gain over May, and marking its second month of improvement.

The surge in consumer confidence comes a week after a surprising federal jobs report found the U.S. has regained 2.5 million jobs, lowering the jobless rate to 13.3%.

Economists had predicted the unemployment rate would instead hit 19%, rivaling the worst days of the Great Depression.

Another factor fueling the optimism, the survey noted, has been the move by states across the country to reopen their economies.

"The turnaround is largely due to renewed gains in employment, with more consumers expecting declines in the jobless rate than in any other time in the long history of the Michigan surveys," said Richard Curtin, chief economist and director of the survey, in a statement.

Also posting significant gains were the University of Michigan's indices tracking the outlook on economic conditions and consumer expectations.

The index measuring the outlook on the economy rose 6.7% to 87.8, while the consumer expectations index jumped 10.9% to 89.3.

Still, consumers, like investors, remain concerned about the coronavirus and the potential for a second wave that could trigger another economic shutdown.

And while they are optimistic that jobs are coming back, many consumers still see a hard slog ahead, Curtin noted.

"Despite the expected economic gains, few consumers anticipate the reestablishment of favorable economic conditions anytime soon," Curtin said.