Industry News

Consumer confidence rises

Survey: 75% of consumers expect Fed to keep raising rates

Consumer confidence rose in the latest survey largely due to gains among households with incomes above $50,000, and the majority of consumers expect the Federal Reserve to continue to raise overnight interest rates, according to the University of Michigan's Survey of Consumers. "Higher-income households much more frequently reported that their finances had improved and more frequently anticipated further gains during the year ahead," according to Richard Curtin, director of the survey. Three out of four consumers in the March survey said they expected continued interest-rate hikes, and consumers emphasized the importance of price discounts to their buying plans for everything from homes, to vehicles, to household appliances and furniture. The discounts were seen as critical to offset the higher costs of credit, according to the survey. While personal consumption expenditures are expected to grow by nearly 3 percent during 2006, new residential investment is expected to decline. "The...