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Published: Tuesday, 8/31/2010

Consumer confidence up in survey, but not by much

ASSOCIATED PRESS
A shopper at a mall in Glendale, Calif., is confident enough to make purchases in a quantity for which she enlisted the help of a valet and a concierge in loading her car. A shopper at a mall in Glendale, Calif., is confident enough to make purchases in a quantity for which she enlisted the help of a valet and a concierge in loading her car.
DAMIAN DOVARGANES / AP Enlarge

NEW YORK - Americans' confidence in the economy improved slightly in August from July, but they are still roughly as gloomy as a year ago.

The downbeat sentiment underscores the challenges ahead for the increasingly shaky recovery and for retailers, which are grappling with a weak start to back-to-school shopping.

Worries are growing about the critical holiday shopping season.

The Conference Board, a private research group, said Tuesday that its Consumer Confidence Index rose to 53.5 from a revised 51.0 in July. Economists surveyed by Thomson Reuters had expected 50.5. The increase follows two straight months of declines.

"The consumer is still struggling, and the prospects look like more of the same," said Ken Perkins, president of research firm RetailMetrics.

An index of 90 or more indicates a healthy economy. That level has not been approached since the recession began in December, 2007.

The index measures how Americans feel about business conditions, the job market, and the next six months. It had been recovering fitfully since hitting an all-time low of 25.3 in February, 2009.

In August, 2009, the index stood at 54.5, only a point higher than now. Since then, it has mostly hovered in a tight range between the mid-40s and the high 50s. May, 2010 proved to be the only exception, at 62.7 - still weak.

There appears to be no catalyst that would get Americans to feel better soon.

Home sales are plunging, consumers are saving more and spending less, unemployment is still near 10 percent.

Economists watch confidence closely because consumer spending is critical to a strong rebound.



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