Newspaper article THE JOURNAL RECORD

Consumer Confidence Increases

Newspaper article THE JOURNAL RECORD

Consumer Confidence Increases

Article excerpt

Associated Press

NEW YORK _ American consumer confidence strengthened in December to the highest level in 4 years, a leading business group reported Tuesday in a survey that suggested the economy will expand further next year.

But new signs of weakness also emerged in the confidence data from the Conference Board as well as a separate report from a real estate trade group, which showed rising interest rates may be starting to slow the economy down.

The Conference Board's survey showed the perception of more job opportunities and low inflation have made consumers more comfortable about their present financial security.

The group's index of consumer sentiment, based on survey results, rose to 102.2, up from a revised reading of 100.4 in November and the highest since a 102.4 reading in June 1990.

The index, calculated from a base of 100, is derived from responses to questions sent to 5,000 households nationwide on topics that range from local job availability to plans for purchasing a washing machine.

It is considered a useful barometer by some economists for anticipating the spending and borrowing patterns of consumers, who account for two-thirds of all economic growth.

"I think we're seeing in the data that the economy has improved a lot this year, to the point where people feel good about it," said Gary Thayer, a senior economist at A.G. Edwards Sons Inc., a St. Louis investment firm.

Fabian Linden, head of the Conference Board's consumer research unit, attributed the confidence levels to the four-year low in national unemployment rates and the country's benign inflation rate, which has remained below 3 percent for the third straight year.

"These two measures are among the most important factors affecting consumer confidence," he said. "The latest survey readings strongly suggest that 1995 should be another good year for the U. …

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