Europe South Asia Asia Pacific Americas Middle East Africa BBC Homepage World Service Education



Front Page

World

UK

UK Politics

Business

Sci/Tech

Health

Education

Sport

Entertainment

Talking Point

In Depth

On Air

Archive
Feedback
Low Graphics
Help

Tuesday, May 25, 1999 Published at 15:29 GMT 16:29 UK


Business: The Economy

US consumers think positive

US shopping malls are happy places as consumers want to spend

US consumers are growing more confident about the economy - and are planning to spend even more money.

The latest survey of 5,000 households by the Conference Board, a US business group, shows that low prices and few worries about unemployment are keeping consumers happy.

"Neither the crisis in Kosovo nor recent price surges at the gas pump have cooled consumer optimism," said Lynn Franco, of the Board's Consumer Research Centre.

She added that "low inflation and a strong job market are providing a durable foundation for historically high levels of consumer confidence."

The main index of consumer confidence rose to 135.8 in May from 135.5 in April. It was the seventh straight increase, and "the longest uptrend in the 32 year history of the survey", according to the Board.

Rebound since last summer

The index has recovered sharply since the autumn when the Russian default threatened a world financial meltdown.

Currently only one in eight US households believe jobs are hard to find, while one in four believed their incomes would rise.

Optimism about current business conditions is even stronger, with 44% believing them to be good, as opposed to only 8% who say they are poor.

"Unemployment is low, those who want to work can. Wages are rising faster than inflation, so consumers are getting ahead," said Gary Thayer, chief economist at A.G. Edwards and Sons.

Slowdown needed

Consumer spending makes up two-thirds of the US economy, and the survey evidence suggests that it will continue to soar.

That could worry the US central bank, the Federal Reserve, which recently declared itself on inflation alert, saying it would raise interest rates if necessary.

The US economic boom has helped keep the rest of the world out of recession. However, this in turn is sucking in imports, triggering a burgeoning trade deficit.

In the last three months, the United States has had the highest growth rate among the world's big industrial countries, with Gross Domestic Product - the total output of an economy - growing at an annual rate of 4.5%.





Advanced options | Search tips




Back to top | BBC News Home | BBC Homepage | ©


The Economy Contents


Relevant Stories

18 May 99 | The Economy
No change in US rates

14 May 99 | The Economy
Surprise leap in US inflation

11 May 99 | The Economy
US productivity surge continues

07 May 99 | The Economy
US jobs galore

30 Apr 99 | The Economy
US economy storms ahead





Internet Links


The Conference Board


The BBC is not responsible for the content of external internet sites.




In this section

Inquiry into energy provider loyalty

Brown considers IMF job

Chinese imports boost US trade gap

No longer Liffe as we know it

The growing threat of internet fraud

House passes US budget

Online share dealing triples

Rate fears as sales soar

Brown's bulging war-chest

Oil reaches nine-year high

UK unemployment falls again

Trade talks deadlocked

US inflation still subdued

Insolvent firms to get breathing space

Bank considered bigger rate rise

UK pay rising 'too fast'

Utilities face tough regulation

CBI's new chief named

US stocks hit highs after rate rise

US Fed raises rates

UK inflation creeps up

Row over the national shopping basket

Military airspace to be cut

TUC warns against following US

World growth accelerates

Union merger put in doubt

Japan's tentative economic recovery

EU fraud costs millions

CBI choice 'could wreck industrial relations'

WTO hails China deal

US business eyes Chinese market

Red tape task force

Websites and widgets

Guru predicts web surge

Malaysia's economy: The Sinatra Principle

Shell secures Iranian oil deal

Irish boom draws the Welsh

China deal to boost economy

US dream scenario continues

Japan's billion dollar spending spree