Confidence in US economy reaches 7-month high

11 Aug, 2004

US consumers mostly shrugged off recent signs of a slowing economy, as bright prospects for the rest of the year pushed confidence to a seven-month high in August, a survey said on Tuesday.
Investor's Business Daily and TechnoMetrica Market Intelligence said their economic optimism index increased in August to 57.7 from 57.3 in July. A reading above 50 indicates optimism.
"Americans are still quite optimistic about their economic future," said Raghavan Mayur, president of TIPP, a unit of TechnoMetrica Market Intelligence. Mayur noted in a statement that the index's six-month outlook component, which rose by 1.1 points to 58.2 in August, typically stays in the mid-40s during economically difficult times.
Recent disappointing news on the job market may have arrived too late for consumers to be negatively affected, the survey said. Late last week, the government reported the economy generated 32,000 new jobs in July, about a seventh of what economists had predicted.
However, falling stock prices and rising oil prices could be affecting how consumers view their own finances. The index's personal financial outlook measure slipped 0.6 points to 62.7.
The component that gauges confidence in the government's economic policies increased by 0.7 points to 52.1.
The gauge is based on over 1,000 interviews during the first week of August, and foreshadows the widely watched University of Michigan survey, due on Friday, as well as another consumer confidence survey from the Conference Board, a private business group.

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