Wednesday, January 26, 2000

Index rates consumers as thrilled




BY SETH SUTEL
The Associated Press

        NEW YORK — Consumer confidence, a driving force in the economy's long expansion, has soared to its highest level in the 33 years that the statistic has been kept, driven by the booming stock market and plentiful jobs.

        “Consumers have every reason to be optimistic. There is just nothing going wrong,” said economist Mark Zandi at Regional Financial Associates in West Chester, Pa.

        The Conference Board, which studies business and finance trends, reported Tuesday that its Consumer Confidence Index rose to 144.7 in January. That's the highest level reached since the business-financed group began keeping records in February 1967.

        Wall Street analysts had expected a reading of 141.5 in the index, which is based on monthly interviews with 5,000 U.S. households and measures consumer optimism about current and future business conditions.

        Economists pay close attention to the index since consumer spending makes up about two-thirds of the U.S. economy and is a major factor behind the current U.S. growth streak, which is due next month to become the longest on record.

        Mr. Zandi attributed the euphoria to a confluence of factors: historically low levels of unemployment, a booming stock market and low inflation. Some economists caution, however, that the U.S. economy's heavy reliance on consumer spending can be a mixed blessing since sentiment can be affected by un- foreseen factors.

       



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