After falling two months in a row as Americans grappled with high unemployment and a weakening economy, U.S. consumer confidence improved unexpectedly in August after falling two months in a row as Americans grappled with high unemployment and a weakening economy, a key survey showed on August 31.
The Conference Board, a business research firm, said its consumers' confidence index, based on a survey of 5,000 U.S. households, rose to 53.5 points in August from 51.0 in July. It was better than the 50.0 expected by economists.
It takes a reading of 90 points to indicate a healthy economy -- a level unseen since the recession struck in December 2007.
The Conference Board's present situation index, a gauge of consumers' assessment of current economic conditions, however fell to 24.9 from a revised 26.4 in July as employment concerns continued to weigh heavily on consumer attitudes.
"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's consumer research center.
"This report is far from stellar. It is just less bad than many of the other reports," said analyst Jon Ogg at 24/7 Wall Street, noting a string of recent negative U.S. economic data.
On August 27, the government said economic growth slumped to 1.6% in the second quarter from 3.7% in the first three months of 2010. Some economists are projecting growth to dip below one percent in the third quarter.
The growth slowdown comes on the back of a high 9.5% unemployment rate.
"The list of economic headwinds facing consumers is still lengthy, although many seem to be moderating," said Scott Hoyt, a senior director of consumer economics for Moody's Economy.com. He cited high joblessness, only modest growth in wages, and difficulty obtaining credit as among factors putting pressure on household finances.
Copyright Agence France-Presse, 2010