WASHINGTON: US consumer sentiment recovered to near record levels in July after falling for two months in a row, according to a monthly survey released on Tuesday.

Consumers reported rosier outlooks for the present and in the months ahead, but hopes for higher income cooled somewhat, according to the Conference Board.

The Consumer Confidence Index rose 3.8 points to 121.1 after a downward revision in June and a surprise dip in May. Analysts had been expecting a half-point decrease.

The index is still down from a high recorded in March of 124.9 points.

The figures came as the Federal Reserve was set to kick off a two-day meeting on monetary policy, and as unemployment is at a very low 4.4 per cent, helping to boost household spending.

“Overall, consumers foresee the current economic expansion continuing well into the second half of this year,” Lynn Franco, the Conference Board’s director of economic indicators, said in a statement.

“Consumers’ assessment of current conditions remained at a 16-year high.” Consumers felt slightly more positive about the current situation, with the share of those saying business conditions were “good” rising 2.7 points to 33.3pc.

Survey respondents were also more optimistic about the short-term, with the percentage of consumers expecting business conditions to improve in the next six months rising 2.8 points to 22.9pc.

Consumers were also less likely to fear that in the coming months jobs would become more scarce. However, the share of respondents expecting to earn more fell nine tenths of a point to 20pc.

“We view this as further confirmation that US household sector is on solid footing and the first quarter weakness in consumer spending is likely to be temporary,” Blerina Uruci of Barclays said in a research note.

Published in Dawn, July 26th, 2017