Conf. Board: Consumer Confidence Picks Up
NEW YORK – The mood of U.S. consumers brightened unexpectedly in August as an improving job market outweighed rising gasoline prices, a survey showed Tuesday.
The Conference Board (search) said its consumer confidence (search) index rose in August to 105.6 from a revised 103.6 in July. Analysts had predicted a decline in August to a reading of 101.5.
Consumers were buoyed by better employment prospects, with the index of "jobs plentiful" rising to 23.5 percent from 22.9 percent and the one saying jobs are hard to get easing to 23.2 percent from 23.8. It was the first time since October 2001 that those claiming jobs were plentiful outnumbered those saying jobs were hard to get.
The research group's present situation reading improved to 123.6 from 119.3 in July, its highest in nearly four years. The expectations index measure edged up to 93.7 from 93.2.
Consumer spending (search) is the backbone of the U.S. economy, accounting for two-thirds of activity, so changes in confidence are seen as a possible precursor to softer or stronger growth.
In recent years, however, the correlation between confidence and retail sales has weakened, as consumers buy cars and homes even as they tell surveys things are getting worse.