U.S. consumer sentiment at two-year high

U.S. consumer sentiment was the most optimistic in more than two years in June, but remained far below average level, according to a survey released Friday by Reuters and the University of Michigan.

The UMich index rose to 76.0 in late June, up from 73.6 in May and 75.5 in mid-June. The average level of the index is around 87.

Consumers expect a very slow pace of economic growth, the survey said.

Consumer confidence returns

A measure of U.S. consumer confidence recorded its biggest jump since April 2003. The Conference Board Consumer Confidence Index shot up to 54.9 in May from 40.8 in April despite plunging home prices and raging unemployment.

The survey found fewer Americans, 44.7%, reporting that jobs were “hard to get” than in previous months. However, only 5.5% said they intended to buy a car and 2.3% planned to buy a home.

Consumer Confidence at the Lowest Level

The Conference Board's Consumer Confidence Index fell to an all-time low of 38 in December from a revised 44.7 in November. The record drop reflects the worsening U.S. economy, raising unemployment, deteriorating housing market, falling stock markets, and uncertain outlook for the New Year.

The gloomy job market and falling asset prices appear to have outweighed declining consumer prices in consumers' minds. Layoffs and income cuts were widespread this year. The unemployment rate has crept up to 6.7 percent in November, the highest jobless rate in the past 15 year. The number of Americans filing for first-time unemployment benefits rose to a 26-year high for the week ended Dec. 20.

The dismal news came at the end of a full year of recession. During the year the credit crunch has strained the financial system as central banks struggle to raise capital. Meanwhile, S&P 500 index has plummeted more than 40 percent and housing prices have plunged 18 percent on year to year basis in October.

U.S. Consumer Confidence At Lowest Level Ever

U.S. consumer confidence plunged in October to its all-time low as consumers badly hurt by the financial crisis, the Conference Board reported Tuesday.

The overall index of consumer confidence plunged by a massive 23.4 points in October from last month revised-reading of 61.4, to a new low of 38, the lowest reading ever recorded since the survey began in 1967.

The report was extremely awful, wiping out any optimism that had been gained as oil and fuel prices tumbled from this summer’s record highs.

Consumers are feeling the brunt of this recession and a significant deterioration in the job market. Household wealth has evaporated owing to plummet home prices and plunge in the stock market. In addition, consumers are struggling to finance their purchases because of ever-tightening lending standards

The pessimistic consumer confidence reading echoes forecasts that consumer spending will likely decline in the third and fourth quarter of this year. As a result, gross domestic is expected to decline at a steep rate in the final three months of this year. Consumer spending has driven more than two-thirds of U.S. economic growth.

Signs of Improvement as U.S. Consumer Confidence Rose in August

U.S. consumer confidence rose in August, the second consecutive month of gains, the Conference Board reported Tuesday. The August consumer confidence index rose to 56.9 from a July reading of 51.9.

The percentage of consumers saying jobs are "hard to get" rose to 32 percent in August from 30.2 percent in July. Meanwhile, the percentage of consumers expecting business conditions to worsen over the next six months fell to 25.8 percent from 32.4 percent.

The level remained relatively low and job concerns persisted. The results showed that consumers had a bleak view of the current economy, but harbored better hopes for the future. They may be showing signs of improvement by early next year.

The index was based on a survey of 5,000 U.S. households conducted by TNS for the New York-based Conference Board, a business research organization. The index uses 1985 as its benchmark, setting the index at 100. Any score above 50 means growth, while a score below 50 signals a decline.

Confidence measures are generally viewed as a barometer of consumer spending, which accounts for two-thirds of the U.S. economy. However, economists note that consumers do not always act in accordance with their statements to surveys.

U.S. Consumer Confidence Plunged to 16 Year Low

The Conference Board, a private business-backed research group, announced on June 24 that its index of consumer confidence for the month sank to a 16-year low. The drop in the U.S. consumer confidence index to 50.4 in June leaves the index only just above prior cycle-lows of 47.3 in February, 1992, and 50.1 in May, 1980.




Scarce jobs, enormous gas prices, higher food prices, sinking home values have shaken consumers. The plunge in the consumer confidence index shows also deepening worries about inflation. The U.S. consumer confidence report provided a few more fresh records of public dreariness over growth and inflation prospects. Lower consumer confidence tends to result in lower consumer buying, which is a drag on the economy further down.

Current pessimism is focused straight on economic and inflation developments, as was the case through the stagflation years of the 1970s and the difficult 1980-1982 period. Throughout the 2001 recession, in contrast, the confidence drop that year reflected pessimism associated with the September 11 terrorist attacks rather than the economy in specific. Likewise, in the 1990 recession, public pessimism reflected concerns about the impending Gulf War in the aftermath of Iraq's invasion of Kuwait.