Interest Rate, Inflation Fears Weaken Consumer Spending
NEW YORK — Fears of higher interest rates and rising inflation weakened consumer buying plans in June as confidence in the American economy slipped from an 18-year high in May, a report said Wednesday.
The national survey by the Conference Board, a business-financed research group, found that fewer consumers expect economic conditions to improve in the immediate future.
Only home-buying plans increased in June, according to the monthly survey conducted for the board by National Family Opinion Inc. of Toledo, Ohio.
“Fears about inflation and interest rates may well have contributed to the current dip in confidence,†Fabian Linden, executive director of the board’s Consumer Research Center, said in a news release.
Nevertheless, June’s confidence index of 115.5, down from 120.2 in May, was 12 points higher than its year-ago level, Linden said.
Some 27% of the people surveyed considered business conditions good last month, compared to 32% in May. Twenty percent expected business conditions to improve during the next six months, down from 22% who thought so in May.
The board’s survey of 5,000 U.S. households found that 72% expected interest rates to rise, an increase from 67% the previous month.
About 8.5% of the consumers polled said they planned to buy a car in the next six months, a drop from 9.4% in May. Twenty-nine percent said they planned to buy major appliances, down from 36%.
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