Consumer Confidence Rises, Signaling Economy's Strength
May 09, 2011
NEW YORK -- Consumer confidence hit a six-year high in August, advancing for a second straight month in a fresh signal of strength in a key sector of the U.S. economy. The Conference Board's Consumer Confidence Index rose 2.4 points to 109.4 this month after rising 7 points in July, the business research group said Tuesday morning. Most economists had expected a decline to about 105. Consumer confidence is watched closely for indications of consumer spending, which accounts for about two-thirds of the nation's economy. The Conference Board also reported that consumers' opinion of current business conditions rose 2 points and their expectations for the next six months climbed 3 points. They were the highest confidence levels about current and future business conditions since March 1990. Lynne Sykes, associate director of the Board's Consumer Research Center, said the two-month advance indicates consumer optimism may be ``on an upward trend after remaining stagnant for more than a year.'' Nearly 29% of surveyed families described current business conditions as ``good'' in August, rising from less than 28% in July. Only 7.4% of consumers expected conditions to deteriorate, down from 8.2% in July. However, consumers were not as sure about the employment outlook. About 23% said jobs were difficult to find this month, up slightly from July. But nearly 15%, slightly more than in July, expected more jobs to become available in the next six months. Consumer optimism was widespread across the nation, rising in nearly every major region. The biggest gains were on the Pacific Coast, followed by New England. The only decline was in the Rocky Mountain region, though optimism continues at high levels. The index, calculated from a base of 100, is derived from responses to questions sent to 5,000 households nationwide. They are polled on matters ranging from job availability to home-buying plans. The Conference Board is a private business-financed research organization based in New York.
