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US Economic Confidence Increases - 2003-08-26


Americans believe the nation's economy is making a comeback, a new survey indicates. Consumers say they are optimistic that the business climate will improve during the next six months.

Consumers expect the U.S. job market, a cornerstone of the nation's economy, to strengthen in the coming months. The Conference Board, the private business research group that conducted the survey of 5,000 U.S. households, sees this as a signal that the three-year-old slump may be coming to an end.

"This bounce-back and volatility that we have been having during the past several months is often a pattern that we see prior to the economy picking up steam," said Lynn Franco, director of the Conference Board's research center. "It is often seen coming out of a recovery."

The Conference Board asked Americans of different ages, financial backgrounds and regions of the country to assess traditional economic indicators, such as business and employment conditions. In the August survey, this index of consumer confidence jumped sharply to 94.4, compared with 86.3 in July and 96.4 in June.

Ms. Franco says the expectations index is a good measure of consumers' increasing optimism. "It does show that consumers feel that the economy is going to gain steam in the next several months. We take a gauge of current conditions and we also take a gauge of how consumers feel about short-term outlook," she says. "Consumers generally seem to think more in the short term than the long term."

Although consumers' six-month expectations gained ground from last month, their appraisal of current business conditions remains mixed. Those consumers rating present business conditions as "bad," edged up to 30.9 percent from 30.2 percent.