Consumer Confidence Continues to Rise

At its highest level since June 2002, ''fueled by gains in employment.''
Ed ZwirnJuly 28, 2004

Consumers are more confident about the economy than at any time in the past four years, according to the Conference Board.

The private forecasting group announced Tuesday that its consumer confidence index, which increased sharply in June, posted further gains in July. The index, which is based on a representative sample of 5,000 U.S. households, stands at 106.1, up from 102.8 in June. The board’s “expectations index” jumped to 105.8 from 100.8, and its “present situation index” edged up to 106.5 from 105.9.

“Consumer confidence has now increased for four consecutive months and is at its highest level since June 2002, when it registered 106.3,” said Lynn Franco, director of the board’s Consumer Research Center, in a statement. “The spring turnaround has been fueled by gains in employment, and unless the job market sours, consumer confidence should continue to post solid numbers.”

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Consumer assessments of current conditions were somewhat mixed, but favorable overall. The figures for those saying business conditions are “good” were relatively flat, at 25.6 percent compared with 25.8 percent last month. Those claiming conditions are “bad,” however, edged up to 19.1 percent from 17.4 percent. Those saying jobs are “plentiful” rose to 19.8 percent from 18.3 percent, while the figures for those who claim jobs are “hard to get” were virtually unchanged at 26.0 percent, compared with 26.2 percent in June.

Expectations for the next six months are also somewhat mixed, but more optimistic than last month. Those anticipating business conditions to worsen declined to 7.0 percent from 9.1 percent. The figures for consumers who expect conditions to improve remained relatively unchanged at 23.2 percent, compared with 23.5 percent in June.

The employment outlook remains optimistic. Consumers expecting that fewer jobs would become available declined to 13.1 percent from 16.8 percent, although those anticipating more jobs eased off as well, to 19.4 percent from 19.9 percent. In addition, the figures for consumers who expecting the incomes to rise during the next six months declined to 18.1 percent from 19.7 percent.