Consumer Confidence rises in August

But readings suggest economy ‘remains stuck in neutral'

Staff Staff -- Furniture Today, August 27, 2008

NEW YORK - Following gains in July, consumer confidence, as measured by the Conference Board Consumer Confidence Index, showed continued growth in August with a reading of 56.9 compared with 51.9 for the previous month.

That positivity spilled over to the Expections Index, which measures the outlook for the short term. There, the reading was 52.8, up from 42.7 in July. However, the Present Situation Index dipped to 63.2 from 65.8 the previous month.

"Consumer confidence readings suggest that the economy remains stuck in neutral, but maybe showing signs of improvement by early next year," said Lynn Franco, director of the Conference Board Consumer Research Center. "Declines in the Present Situation Index, both in terms of business conditions and the labor market, appear to be moderating. The Expectations Index, which posted a significant gain this month, suggests better times may be ahead.

"However, overall readings are still quite low by historical standards and it is still too early to tell if the worst is behind us."

Consumers' view of the current labor market dimmed a bit, with 32% agreeing that jobs are more difficult to get, up from 30.2 in July. Those saying jobs were plentiful declined to 13.1% compared with 13.6%. However, the job outlook was more optimistic - those expecting fewer jobs in the next few months dropped to 30.6% from 37.3%. And those expecting more jobs to come on the market rose to 10.5% from 8%.

Those surveyed also showed confidence in their salaries, with 14.7% expecting their income to rise, a slight increase from July's 14.3%.