ANN ARBOR—Consumer confidence posted its third largest monthly gain in the The Index of Consumer Sentiment was 86.0 in the While a renewed recession is now unlikely, just as the surge in confidence did not insure more robust growth in 1991, the recent surge will not guarantee more rapid growth in 2003. The much larger gain that was recorded after the first Iraqi war was completely reversed by the end of 1991 due to the emergence of a “jobless” recovery. “Those same concerns about wage and job prospects that dominated the early 1990’s have again been expressed by consumers,” according to Curtin. While the data indicate that consumers no longer fear that their finances will worsen, consumers have not adopted a more optimistic outlook for growth in jobs and wages. Declines in gas prices prompted more favorable assessments by consumers of their finances. Consumers anticipated a much lower rate of inflation during the year ahead. “Consumers expected the CPI to increase by 2.4% during the year ahead, down from the actual annual gain of 3.0% recorded in March,” according to Curtin. Consumers anticipated a somewhat faster pace of economic growth during the rest of the year, but few thought it would be strong enough to improve job prospects. “More than twice as many consumers expected the unemployment rate to inch upward than to decline in the months ahead,” Curtin said. Confidence in government policies to stimulate job growth remained at the lowest levels recorded under the Bush administration. Consumers did not report any renewed strength in their buying plans in April. Home and vehicle buying attitudes have remained at relatively positive levels, but buying attitudes toward furniture, appliances, home electronics, and other large household durables hovered near the lowest levels recorded in ten years. Nonetheless, the gain in confidence will help to improve retail sales from their recent lows. Overall, personal consumption spending adjusted for inflation will remain sluggish, with a 2003 growth rate of about 2%. Established in 1948, the Institute for Social Research (ISR) is among the world’s oldest survey research organizations, and a world leader in the development and application of social science methodology. ISR conducts some of the most widely-cited studies in the nation, including the Survey of Consumer Attitudes, the National Election Studies, the Monitoring the Future Study, the Panel Study of Income Dynamics, the Health and Retirement Study, the Columbia County Longitudinal Study and the National Survey of Black Americans. ISR researchers also collaborate with social scientists in more than 60 nations on the World Values Surveys and other projects, and the Institute has established formal ties with universities in Poland, China, and South Africa. Visit the ISR Web site at www.isr.umich.edu for more information. ISR is also home to the Inter-University Consortium for Political and Social Research (ICPSR), the world’s largest computerized social science data archive.

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