US Consumer Confidence Jumps
The labor market is doing wonders in the United States, despite pretty average situation everywhere else. The consumer confidence index in the country went above the expectations of the analyst due to increase in the minimum wages. The higher income in the hand of consumer means more spending in economy. As the disposable income will increase, the consumption will also grow and this will result in overall economic recovery by the end of the current financial year.
The strong economic data released by the government was the result of cheerful consumer mood in the market. The growth has been getting back on track after slow start in the first two quarters this year. The gasoline prices were increased in the country recently but this didn’t affect the world’s largest economy. Confident retail sales, controlling inflation pressures and tightened labor market has resulted in the strong consumer confidence in the country. The Federal Reserve should be happy about the economy now and should consider the much awaited interest rates hikes. Investors world over have been watching the US central bank due to delayed decision.
The June policy meeting of Federal Reserve is scheduled next week and everyone expects something about the interest rate hike. Deputy Chief Economist Millan Mulraine from New York based TD Securities informed that once the central bank is convinced about the sustainability of the economic growth, they will definitely start moving the direction of the rate hike. Lending rate has been near zero since 2008 due to financial collapse.