US consumer confidence hits five-month high as oil pressures recede

(Sharecast News) - Consumer sentiment across the United States hit a five-month high in July, according to a closely watched survey released Friday by the University of Michigan, rising for the second straight month after dropping to a record low in May. The survey's headline index of consumer sentiment improved to 54.4 this month, from 49.5 in June, coming in comfortably ahead of the consensus forecast of 51.0.

The gauge slumped to its lowest-ever reading of 44.8 in May as oil prices hit four-year highs amid an escalation of conflict across the Middle East.

However, confidence has improved markedly over recent months as energy price growth eased considerably.

The University's current economic conditions index rose to 54.9 from 47.7 in June, while the index of consumer expectations increased to 54.0 from 50.7.

"With the second straight month of 10% jumps, consumer sentiment climbed to its highest reading since February of this year on the basis of easing price pressures at the pump in recent weeks," said the university's surveys of consumers director Joanne Hsu.

"However, with prices remaining frustratingly high, consumers are hardly ebullient about the economy; sentiment is down 12% from a year ago. Thus, sentiment's upward momentum may prove difficult to sustain if recent declines in gas prices continue to reverse course."