Friday, August 27, 2010

Sluggish Increase in Consumer Sentiment; Index Up 1.6 Points

In August, the University of Michigan Consumer Sentiment Index rose 1.6 points to 68.9. The index rose more than many forecasters had expected. Despite the increase, consumers continue to be concerned about income growth and job prospects. According to the survey, a quarter of households had seen their finances improve during August survey period, which was due to individuals paying down debts and building up savings.

The measurement of future expectations dropped a year-over-year 3.2 points to 62.9. The relatively flat economic outlook in the expectations index is attributed to roughly 80% of consumers not expecting a decline in unemployment. Despite the pessimism about jobs, consumers were twice as optimistic about the labor market as they were two years ago.

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