End to Drought Cited as Index of Consumer Confidence Rises

Consumers felt more confident about the economy last month than in the previous two months after a devastating drought in the nation’s Farm Belt ended, a research group reported Wednesday.

The Conference Board, a business-financed nonprofit group, said its consumer confidence index climbed to 119.2 in August, up nearly 6 points from July and 3.5 points from June. The monthly survey, which covers 5,000 U.S. households, is conducted for the board by National Family Opinion Inc. of Toledo, Ohio.

“The strong increase in consumer confidence was largely due to a better mood in America’s Farm Belt,” said Fabian Linden, executive director of the board’s Consumer Research Center.

Linden said improved weather conditions and government support payments to affected farmers led to last month’s gains.

“Confidence also is up in the rest of the nation, spurred by the continuing vigor of the economy,” he said.

The survey found that more people said they planned to buy homes and major appliances last month than in July. Some 4.1% had home-buying plans in August, up from 3.5% in July, and 34% planned a major appliance purchase, compared to 30% in July.

However, fewer people were planning to buy a car, dropping to 7.2% last month from 8.9% in July.

The survey found that 32% of consumers polled thought business was good, up from 28% in July. Nearly 22% felt that the economy would get better, compared to 20% the previous month.

In addition, 20% of those surveyed thought jobs would increase in the next six months, up from 18% in July.