In an economic surprise, U.S. consumer confidence, as measured by a closely watched Conference Board index, rose this month. It was widely assumed that concern about dramatically rising prices for gasoline would drive down consumer enthusiasm in August. That did not happen. Its consumer confidence index this month rose to 105.6 (1985=100), two full points higher than July's revised figure of 103.6, the Conference Board, a New York-based business research group, reported on August 30.
"Consumers appear to be weathering the steady rise in gas prices quite well," said Lynn Franco, director of the Conference Board's Consumer Research Center. She noted that consumers' confidence in the U.S. economy right now is at its highest since September 2001. "Expectations continue to suggest more of the same for the remainder of the year," she added.
The confidence index is closely watched since consumer spending accounts for about two-thirds of U.S. economic activity. The survey from which the index is calculated is conducted by TNS NFO and based on a representative sample of 5,000 U.S. households.