Confidence up slightly for month
NEW YORK – Americans’ confidence in the economy improved slightly in August from July, but they’re still roughly as gloomy as a year ago.
The downbeat sentiment underscores the challenges ahead for the increasingly shaky recovery and for retailers, which are grappling with a weak start to back-to-school shopping. Worries are even growing about the critical holiday shopping season.
The Conference Board, a private research group, said Tuesday that its Consumer Confidence Index rose to 53.5 from a revised 51.0 in July. Economists surveyed by Thomson Reuters had expected 50.5. The increase comes after two straight months of declines.
“The consumer is still struggling, and the prospects look like more of the same,” said Ken Perkins, president of research firm RetailMetrics.
An index of 90 or more indicates a healthy economy. That level hasn’t been approached since the recession began in December 2007. The index – which measures how Americans feel about business conditions, the job market and the next six months – had been recovering fitfully since hitting an all-time low of 25.3 in February 2009.
“The comfort … is that confidence did not fall further,” Paul Dales, U.S. Economist at Capital Economics, said in a statement. “But there are few signs that households will ramp up their spending. High unemployment, widespread negative housing equity and low share prices are keeping households on the sidelines.”
Investors seized on the bigger-than-expected increase. The Dow Jones industrial average got a boost early in the day on the figure, though it finished just 4.99 points higher. Stocks have been pummeled all month by uncertainty over signs of slowing growth.