27 August 2009
Consumer confidence rises in August
A key measure of consumer confidence jumped much more than predicted in August, as the job market outlook and business expectations improved, according to a new report.
The Conference Board, a New York-based business research group, said its Consumer Confidence Index rose to 54.1 in August from an upwardly-revised 47.4 in July.
Economists were expecting the index to increase to 48. Industry wags closely watch the measure because consumer spending makes up two-thirds of the nation’s economic activity.
The index posted declines in June and July, but the reading “appears to be back on the mend,” said Lynn Franco, a director at The Conference Board. “Consumers were more upbeat in their short-term outlook for both the economy and the job market in August,” Franco added. But the reading for income expectations rose only slightly.
Despite August’s increase, the index remains at historically low levels. An overall reading above 90 indicates the economy is solid, and 100 or above signals strong growth.
The report is the result of a survey mailed to a representative sample of 5,000 U.S. households. The questionnaire asks if consumers think current business conditions are good, bad, or normal, about employment conditions, as well as if they expect employment or income levels to improve or deteriorate over the next six months.
For related information, go to www.isa.org/productivity.
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