Consumer Confidence
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Consumer Confidence Index Improves in October October 28, 2003
The Conference Board's Consumer Confidence Index, which declined last month, advanced in October. The Index now stands at 81.1 (1985=100), up from 77.0 in September. The widely-watched Expectations Index rose to 90.7 from 88.5. The Present Situation Index increased to 66.8 from 59.7. The Consumer Confidence Survey is based on a representative sample of 5,000 U.S. households. The monthly survey is conducted for The Conference Board by NFO WorldGroup. NFO is one of TNS group of companies (LSE: TNN). The cutoff date for October’s preliminary results was the 21st. Climb in confidence could boost retail sales “After declining for five consecutive months, the Present Situation Index reversed course in October,” says Lynn Franco, Director of The Conference Board’s Consumer Research Center. “A more favorable job market was a major factor in the turnaround. And, the belief that this trend will continue has boosted expectations. With the holiday season around the corner, this improvement in consumers’ spirits is a good omen for upcoming retail sales.” Consumers' appraisal of present-day conditions ended a five-month slide in October. Those reporting jobs are “hard to get” eased to 33.8 percent from 35.1 percent. Those claiming jobs are “plentiful” rose to 11.8 percent from 9.9 percent. Consumers’ assessment of current business conditions also improved, with families rating conditions as “good” increasing to 17.2 percent, up from 16.2 percent. Those claiming conditions were “bad” fell to 28.4 percent from 29.5 percent. Consumers’ short-term outlook also picked up in October. Those expecting business conditions to improve over the next six months rose to 23.2 percent from 21.3 percent. Consumers expecting business conditions to become worse edged down to 11.3 percent from 11.9 percent. The employment outlook was also more upbeat. Those anticipating more jobs to become available in the next six months increased to 19.7 percent from 16.6 percent. Those expecting fewer jobs to become available decreased to 20.8 percent from 21.1 percent. The proportion of consumers anticipating an increase in their incomes, however, fell to 16.7 percent from 19.0 percent. Source: October 2003 Consumer Confidence Index, The Conference Board. For further information contact:
Lynn Franco
at (1) 212 339 0344
lynn.franco@conference-board.org
The confidence of American consumers in their economy has slipped unexpectedly in July after it had risen the previous three months.

The Consumer Confidence Index dropped from 106.2 in June to 103.2 this July, the ''Conference Board'' said in New York. Analysts blame it on Amercians' increased fear over job security, wage perspectives, and rising gas prices.

But Lynn Franco, director of the board's ''Consumer Research Center'', is unconcerned: "The overall state of the economy remains healthy and consumers' outlook suggests no storm clouds on the short-term horizon."

In the last months, several large American corporations have announced job cuts. Among them are Eastman Kodak, Hewlett-Packard, and Kimberly-Clark.

Private consumer spending is considered to be the backbone of the U.S. economy since it accounts for two-thirds of its Gross Domestic Product. However, in the last few years, the correlation between consumer confidence and actual retail sales has been questioned since consumers were spending money even when survey figures said they wouldn't.