Confidence is steady

Don Hogsett, May 31, 2004

NEW YORK — Holding on to its big gain of the month before, consumer confidence was virtually unchanged during May, according to The Conference Board, as Americans report they feel better about the jobs outlook and the economy.

The bellwether confidence reading, a widely-watched gauge of future consumer spending, ticked up slightly, to a level of 93.2 from 93 the prior month, when confidence levels surged 5.1 percent from a March reading of 88.5.

Confidence levels are now 5.6 percent beneath their 13-month high of 97.7 recorded in January, and have surged in recent months 21 percent from a low of 77 in September.

The relatively steady overall confidence level masks some uncertainty that crops up on a regional basis, and five of the nation's nine regions reported declining confidence levels, most notably in the West North Central States, where confidence dropped 12.6 percent, and the West South Central region, where it slipped 7.4 percent. The biggest gainer was the East North Central region, up 7.3 percent, followed by the South Atlantic, up 5.9 percent.

Consumers continue to feel good about the current state of the economy, and modestly better about its prospects going forward, helped by an improving jobs outlook.

The improvements are "being spurred by strong employment gains in March and April," said Lynn Franco, director of the business think tank's Consumer Research Center. "This has made consumers more positive about short-term prospects in the months ahead." Indeed, Franco added, "The pickup in the job market is offsetting the impact of rising gas prices and escalating tensions overseas."

The jobs outlook, while improving, remained a mixed picture. The number of consumers who said jobs are "hard to get" rose to 30.6 percent from 28 percent in April. But the number who said jobs are "plentiful" inched up to 16.6 percent from 15.6 percent, according to the center's research.

Consumer confidence by region

Source: The Conference Board
New England 3.8%
Middle Atlantic -6.6
East North Central 7.3
West North Central -12.6
South Atlantic 5.9
East South Central -3.6
West South Central -7.4
Mountain -2.6
Pacific 1.3

Consumer Buying Plans — May
Plans to purchase over the next six months

Source: The Conference Board
Homes 5.6
Carpets 22.9
Cars -7.6
Major appliances. 4.5
Vacation -0.7

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