Consumer sentiment rose more than expected in August and expectations hit the highest level since the recession began, indications that Americans' pessimism about the economy may be lifting.
Consumer sentiment rose more than expected in August and expectations hit the highest level since the recession began, indications that Americans' pessimism about the economy may be lifting.
The housing sector also showed signs of life as a national measure of home prices posted its first quarterly increase in three years.
The New York-based Conference Board said Tuesday its Consumer Confidence index rose to 54.1 from an upwardly revised 47.4 in July. Economists surveyed by Thomson Reuters had expected a slight increase to 47.5.
Still, the index is well below 90, the minimum level associated with a healthy economy. Anything above 100 signals strong growth.
Economists closely monitor confidence because consumer spending accounts for about 70 percent of U.S. economic activity. Consumer sentiment — fueled by signs the economy is stabilizing — has recovered a bit since hitting a record-low of 25.3 in February.
Consumers' expectations for the economy over the next six months rose to 73.5 from 63.4 in July, the highest level since December 2007, when the recession began.
The housing sector also received positive news. The Standard & Poor's/Case-Shiller's U.S. National Home Price Index rose nearly 3 percent in the second quarter from the January-March period, the first quarterly increase in three years. Home prices, while still down almost 15 percent from last year, are at levels last seen in early 2003.
The housing slump and a weak job market have made consumers reluctant to spend.
The Labor Department reported earlier this month that the unemployment rate dipped for the first time in 15 months, and workers' hours and pay rose slightly in July. The unemployment rate slipped to 9.4 percent, from 9.5 percent, while July job losses slowed to a total of 247,000, the fewest in a year and a big improvement from June's 443,000.
