Hope in the future

Don Hogsett, Staff Staff, September 1, 2003

Consumer confidence perked up by 5.6 percent in August, recovering from a drop in July, as consumers liked what they saw coming up in the economy and the jobs market.

And important to future spending plans, they're clearly more bullish about their prospects for a raise. The number expecting an increase in their salary jumped up to 20.1 percent from 15.9 percent.

But they still don't like what's going on now with the economy or the labor market, The Conference Board reported, and gave low marks to the current state of affairs. Underlying the August recovery is rising optimism that things will be substantially better six months down the road, and that was enough to trigger a strong recovery in confidence levels, to a reading of 81.3, up from 77.0 in July.

"Growing optimism about the economy over the next six months echoes the latest gain in The Conference Board's Leading Economic Index. However, continued optimism will depend on positive developments in the labor market," said Lynn Franco, director of the business think tank's Consumer Research Center.

Triggering the rebound in confidence was an improvement in six-month expectations. The number who expect the economy to improve rose to 22.5 percent from 20.0 percent a month ago. And the number who expect conditions to erode fell to 10.7 percent from 11.4 percent in July.

However, the number who think current conditions are bad edged up to 30.9 percent from 30.2 percent.

The current view of the labor market was mixed. The number who said jobs are hard to get rose to 34.1 percent from 32.7 percent last month. But at the same time, the number who said jobs are plentiful also increased, to 11.1 percent from 10.7 percent.

But the outlook going forward is more positive. The number of consumers who think the job market will improve rose to 18.0 percent from 16.6 percent.

Consumer confidence by region

New England 23.9%
Middle Atlantic 9.7
East North Central -3.4
West North Central -25.6
South Atlantic 1.9
East South Central 27.6
West South Central 3.1
Mountain 16.1
Pacific 21.9

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

Source: The Conference Board
Homes +14.3%
Carpets -17.5
Cars -26.4
Major appliances +10.6
Vacation +3.6

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