By Mark Pender

NEW YORK (MNI) – The rattle in the stock market and the unfolding
of events in Europe are being comfortably offset by rising strength in
the jobs market, according to Lynn Franco who heads the U.S. Conference
Board’s consumer confidence report.

“The effects from these types of events are temporary unless
there’s job losses associated with them. They may have some impact but
within a couple of months we’re back to where we were before,” she said
in a phone call with Market News International.

Market volatility did lower the outlook for stocks but not
dramatically. Fewer see an increase in stock prices, 31.7% vs. April’s
34.8%, and more see a decrease, 29.0% vs. 26.8%, but there’s still more
optimists and fewer pessimists than in February when the spread was
28.6% vs. 31.8%.

Though the headline 63.3 index shows a third straight month of
improvement, she downplays the degree of improvement. “This is not
euphoric, we’re just not as bleak as we were three months ago.”

But there is substantial evidence of improvement in the labor
market especially evident in the six-month outlook for jobs which shows
no effect from the approaching end to the census. “Permanent job gains
are boosting confidence,” Franco said.

She added the report’s job readings together with other indications
are consistent with 150,000 monthly payroll growth.

But income expectations are still lagging with pessimists, in what
is unprecedented in the 40-plus years of this report, still outnumbering
optimists.

“It’s a question of wages, lost benefits, 401Ks. Consumers are not
getting the increases they would like. Yes, job conditions are improving
but their financial situation is not improving at the same pace.”

The lack of confidence in income is reflected in buying plans which
remain subdued at best. Buying plans for homes are at only 1.9%, a level
last seen in December. Note that May and December both immediately
followed stimulus expiration.

** Market News International New York Newsroom 212-669-6430 **

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