Despite hints that the recent slump in US manufacturing and retail sales were causing a slowdown in the economy[WAMN:29-Jun-04; 16-Jul-04], consumer confidence levels are at their highest for over two years, according to The Conference Board.
July figures for the Consumer Confidence Index survey, carried out in 5,000 households, are 106.1 – up from 102.8 in June, the fourth consecutive monthly increase.
US economists such as Carl Tannenbaum at LaSalle Bank were concerned by the "less-than-spectacular economic results in June ... that left a lot of us wondering if we would be able to restore the momentum."
The worries relate to a lower than expected number of orders for durable goods, which rose by 0.7% but were a far cry from the predicted rise of 1.9%.
Defense-related capital goods orders unsurprisingly climbed 30.4%, with military aircraft orders swelling by 79.1%. Transportation orders saw a 4.2% increase, but excluding these the overall number of orders fell by 0.6%.
Nevertheless, consumers' assessment of current conditions is largely favourable with a particularly optimistic view of the jobs market. Those respondents claiming jobs are 'hard to get' fell to 26%, the lowest level since September 2002.
Expectations for the next six months are also buoyant. Worsening conditions are expected by just 7%, down from 9.1% in June, while only 13.1% predict fewer employment opportunities during the second half of 2004.
The figures preclude the release of the advance estimate of second quarter gross domestic product. This is predicted to show a dip in growth from 3.9% in the first quarter to 3.6%.
For further information on the consumer confidence index, click here.
Data sourced from: USA Today; additional content by WARC staff