American consumers were about as optimistic about their current economic situation in July as at any time since the end of the recession yet their fears for the future and the fate of the recovery remain unrelieved.
The Thomson Reuters/University of Michigan's preliminary issue of the index of consumer sentiment slipped to 83.9 from 84.1 in June, short of the Reuters poll of economists at 85. May scored 84.5, the second highest post recession reading. The highest post recession score was last November at 84.9.
The index of current economic conditions jumped to 99.7 from 93.8, the highest level since July 2007. But the measure of consumer expectations in six months dropped to 73.8 from 77.8 and was largely responsible for the decline in the overall index.
The recent increases in home mortgage rates spurred by the Fed's public consideration about the longevity of its quantitative easing program, and price increases in gasoline may have dampened consumers’ longer term views on the economy, though stock prices, which are also a major component of the expectations index are near or at records highs.
Mortgage rates have climbed to the highest level in two years. The average 30-year fixed rate loan was 4.51 percent it his week. In November rates reached a record low of 3.51 percent.
The price of a gallon of regular gasoline nationwide was $3.55 yesterday, up from $3.47 at the end of last week
Chief Market Strategist
Chart: FX Street