Consumer Confidence Rises but Less Than Expected

Ann Arbor, MI, Aug. 15, 2008--Consumer confidence rose for a second month in August, the first back-to-back gain in almost two years, according to the Reuters/University of Michigan survey.

The preliminary index of consumer sentiment increased to 61.7, less than forecast, from 61.2 in July. The measure averaged 85.6 in 2007.

Declining gasoline prices may prevent further erosion in consumer spending.

Economists had forecast the confidence index would rise to 62.

Consumers polled by Reuters/University of Michigan said they expect an inflation rate of 4.8 percent over the next 12 months, down from a 5.1 percent forecast in the July survey.

The cost of living was up 5.6 percent in the year ended in July, the biggest jump in 17 years, the Labor Department said yesterday.

A gauge of current conditions, which reflects Americans' perceptions of their financial situation and whether it is a good time to buy cars and other big-ticket items, decreased to 69.3 from 73.1 the prior month.