US consumers build confidence

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Consumer confidence edged upwards in August as stock markets strengthened and job growth numbers remained promising.

The University of Michigan-Thomson Reuters consumer sentiment index rose to 73.6 in the first reading for this month after registering at 72.3 in July.

The most positive portion of the survey centred on how respondents felt about how the US economy is currently performing, which increased to 87.6 in August from 82.7 in July.

“This is the highest reading since January 2008 (94.4) and is in line with the recent stronger-than-expected retail sales and jobless claims data,” said Cooper Howes at Barclays.

The July unemployment report showed the largest job gain since February. The US economy added 163,000 jobs, but the unemployment rate increased to 8.3 per cent because of workers ending their job searches unsuccessfully.

The hope of a strengthening global recovery helped to discount the impact of higher petrol prices, though the high fuel prices did impact the one-year economic outlook. Respondents were not as encouraged about the future of the economic recovery because of concerns of fuel prices getting even higher and the possible impact of inflation on their disposable income, Mr Howes said.

The overall consumer sentiment reading of 73.6 was drastically increased over the same period last year, when the survey hit 55.8 as the nation was embroiled in the debt-ceiling debate, which eventually contributed to the S&P downgrade of US debt.

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