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Consumer Confidence Rebounds in August – Update

September 8, 2010

The Conference Board Consumer Confidence Index increased in August 2010, reversing two straight months of decline, which in turn followed three consecutive months of improvement.

Last month, the Index rose moderately from 51 to 53.5. In July 2010, the Index fell from 54.3 to 51, a less severe drop than June 2010’s decline from 62.7. An improvement in consumers’ short-term outlook drove the overall increase in the Index, even as their assessment of current conditions declined.

Consumers Take Dim View of Current Condition

Although the May 2010 Present Situation Index stood at a low score of 29.5, it was still an improvement from 28.2 the previous month. In June 2010, the Present Situation Index slumped to 26.8, and then fell further to 26.4 in July and 24.9 in August.

Consumers’ appraisal of current conditions continued to weaken in August. Those claiming business conditions are “good” decreased to 8.7% from 8.8%. However, those stating business conditions are “bad” declined to 41.9% from 43.3%. Consumers’ assessment of the labor market deteriorated further, as well. Those saying jobs are “hard to get” increased to 45.7% from 45.1%, while those claiming jobs are “plentiful” declined to 3.8% from 4.4%.

Consumer Optimism about Future Picks Up

Consumers’ short-term future outlook rebounded a bit in August. The Expectations Index increased to 72.5 from 67.5 in July, although it remains down from 72.7 in June.

Those anticipating an improvement in business conditions over the next six months increased to 17% from 15.8%, while those anticipating conditions will worsen declined to 13.4% from 15.3%.
Consumers were also slightly less pessimistic about future employment prospects. Those expecting more jobs in the months ahead increased to 14.6% from 14.2%, while those anticipating fewer jobs decreased to 19.4% from 20.9%. The proportion of consumers expecting an increase in their incomes held steady at 10.6%.

“Expectations about future business and labor market conditions have brightened somewhat, but overall, consumers remain apprehensive about the future,” said Lynn Franco, director of The Conference Board Consumer Research Center. The August 2010 Consumer Confidence Index score is similar to what it was in August 2009 (54.5).

http://www.retailerdaily.com/entry/45442/consumer-confidence-index-update/?utm_campaign=rssfeed&utm_source=rd&utm_medium=textlink

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