Consumer confidence surged during the past month to its highest level since the beginning of the year, with Americans feeling better about their own finances and more optimistic about the future despite renewed terror threats and rising oil prices.
In a survey conducted before Friday's release of Labor Department data showing a sharp slowdown in the creation of new jobs, the AP-Ipsos consumer confidence index climbed to 104.8 in August, up from 92.0 in July.
Consumer confidence has been rising for the past four months amid signs of economic recovery.
For Mike Mainello, a North Carolina businessman retired from the military, evidence of the improving economy is all around him.
"My wife sells new homes to first-time home buyers. They're buying right and left," said Mainello, a 45-year-old conservative Republican from Winston-Salem. "We're finally paying off bills faster than we're incurring them."
The AP-Ipsos survey of consumer attitudes by spending and household found a surge of economic optimism that has shown up in several recent measures of consumer attitudes.
While months of steady improvement in the job market until Friday's announcement of a slowdown has fueled optimism, the AP-Ipsos index found the increase this time was based more on people's improved perceptions of their own personal finances, and their view of how their local economy will be doing six months from now.
The snapshot of consumer sentiment found Americans considerably more upbeat about the economy than a year ago, when the index was at 89.0. Much of the improvement came during the past month, however.
The AP-Ipsos confidence index is benchmarked to a 100 reading on January 2002, the month the index was started by Ipsos.
Lynn Staggs, a 33-year-old saleswoman from Austin, Texas, said she can sense the economy is doing better just from looking around her neighborhood on the way home.
"It seems like the housing market is doing better. I don't see as many houses around here for sale," said Staggs, a political independent. "I see a lot of people in my neighborhood turning up with new cars and making big purchases."
The rise in consumer confidence comes at a time of mixed indicators for the American economy.
The nation's payroll growth slowed dramatically in July with a paltry 32,000 jobs being added a potentially troubling sign that a rough patch the economy hit in June was no aberration.
Many retailers reported lackluster sales gains in July, particularly mall-based apparel chains such as Gap. Some analysts attributed the disappointing sales to higher gasoline prices, which made some people more cautious spenders.
On Wall Street, stocks fell Thursday as worries about rising oil prices rattled investors. And all that combines with renewed fears of terror attacks.
Mark Zandi, an economist with Economy.com, said the increasing optimism was surprising, given the current uncertainty, but said the longterm growth in jobs, along with a healthy housing market might have contributed.
Home sales have been a major factor in the economic recovery this year. Economists said they expect both new home sales and existing home sales to set all-time records for the year, even if sales slump some this summer.
The number of people who felt their personal finances were strong increased from just over two in 10 in July to almost three in 10 now.
More than half of those making $75,000 or more a year, 52 percent, said their financial situation was strong. Only two in 20 of those making $50,000 or less felt that way. Republicans were twice as likely as Democrats to say their personal finances were strong.
The health of the economy is at the center of the presidential campaign, with President Bush arguing that the economy is snapping back, and Democratic nominee, John Kerry, saying any gains in the economy are not helping millions of Americans.
Bonnie Swigert, a 61-year-old Democratic retiree from Grandon, Mo., said she doesn't see the economy getting any better.
"I've known very, very few people that got any of this tax money back over the last two years," she said. "These Republicans haven't got sense enough to take the minimum wage and multiply it by 40 and see how much people are making.
"As far as they're concerned, anybody who makes $40,000 on down, they just don't exist."
The consumer confidence index is based on questions about economic attitudes in a poll of 1,007 adults taken Aug. 2-4 with a margin of sampling error of plus or minus 3 percentage points.