NEW YORK – American consumers’ confidence unexpectedly rose this month as fears about unemployment eased, Bloomberg News reported today.
The Conference Board’s monthly confidence index rose from a revised 47.4 in July to 54.1 in August, a higher reading than forecast and the first increase in three months, the New York-based organization said.
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The news buoyed the stock market, with both the S&P 500 index and the Dow Jones Industrial Average about 0.8 percent higher at 11:44 a.m. in New York.
“We’ve moved into the recovery phase,” Conrad DeQuadros, senior economist at RDQ Economics in New York, told Bloomberg. “The talk about the recession being over, combined with better economic data, stabilization in housing and strength in equity markets is driving consumer confidence higher.”
This month’s figure is more than double the record low of 25.3 the index fell to in February. The index averaged 57.95 last year, Bloomberg said.
The median projection among economists surveyed by Bloomberg was for the confidence index to rise to 47.9 this month from the originally-reported July figure of 46.6. Even the most optimistic of the 67 economists surveyed only predicted a reading of 51.
“Consumers were more upbeat in their short-term outlook for both the economy and the job market in August, but only slightly more upbeat in their income expectations,” Lynn Franco, director of the Conference Board’s consumer research center, said in a statement. “As long as earnings continue to weigh on consumers’ minds, spending is likely to remain constrained.”
By contrast, another widely-cited measure, the Reuters/University of Michigan preliminary index of consumer sentiment, fell this month for the second month in a row.
The White House Office of Management and Budget also forecast today that the economy will grow 2 percent in 2010, less than the previous forecast of 3.2 percent, and projected that U.S. unemployment will reach 10 percent by December. The national jobless rate stood at 9.4 percent in July.
