- The Washington Times - Friday, June 11, 2004

ASSOCIATED PRESS

Consumer confidence grew stronger over the past month as Americans’ attitudes about the economy’s future prospects brightened.

The AP-Ipsos consumer confidence index climbed to 91.3 in June, up from a reading of 87.4 in May. The rise in consumer confidence comes as the economy is on a solid growth track and the job market has made gains.

The latest snapshot of consumer sentiment also shows that Americans’ view of the economy is considerably more positive as compared with a year ago, when the consumer confidence index stood at 86.8.

The AP-Ipsos confidence index is benchmarked to a 100 reading on January 2002, the month the index was started by Ipsos.

“The job situation has improved immensely and the stock market has firmed up a bit,” said economist Ken Mayland, president of ClearView Economics, explaining the rise in consumer confidence.

Consumer spending accounts for roughly two-thirds of all economic activity in this country. Economists predict consumers will keep their pocketbooks and wallets sufficiently open in the months ahead to help support the economy.

A measure of consumers’ feeling about economic expectations over the next six months, including conditions in the local areas where they live or work, registered the sharpest over-the-month increase of four subindexes. That expectations gauge increased to 94.1 in June. That was up from 87.9 in May and exceeded the reading of 72 posted for June last year.

A subindex tracking consumers’ sentiment about the jobs climate rose to 104.4 in June, up from 102.7 the previous month.

Another gauge looking at consumers’ feelings about current economic conditions, however, dipped to 95.6 in June, from 97.9 in May. Economists suggested that might reflect the pinch of higher prices for energy and other goods.

A measure of consumers’ attitudes about making a purchase, saving and other investment decisions also declined in June to 94.7 from 97.4 in the previous month, which economists said may again be related to higher energy prices as well as consumers’ feelings about higher mortgage rates and other borrowing costs.

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