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Gas Prices Fell 50 Cents; Consumers Heartened

NEW YORK (AP) - Falling gasoline prices helped ease American shoppers' worries in September, sending a gauge of consumer sentiment higher than analysts had expected.

The New York-based Conference Board said Tuesday that its consumer-confidence index rebounded to 104.5 from a revised reading of 100.2 in August. Analysts had expected the index to rise to 103. The reading, the highest since July's 107, followed a big dip in August, when employment worries dragged down consumer sentiment.

The private research group's Present Situation Index, which measures how shoppers feel now about economic conditions, rose to 127.7 from 123.9. Its Expectations Index, which measures consumers' outlook over the next six months, rose to 89.0 from 84.4 last month.

"What we are seeing is an easing of concerns. People are becoming less pessimistic, not significantly more optimistic," said Lynn Franco, director of The Conference Board Consumer Research Center.

Lower prices at the pump have helped boost consumer sentiment, economists said. Over the past month, the retail price of gasoline plunged by 50 cents, or 17 percent, to an average of $2.38 a gallon nationwide, according to Energy Department statistics. That is 42.5 cents lower than a year ago, when the energy industry was still reeling from the aftermath of hurricanes Katrina and Rita.

Even more important than lower gas prices, according to economists, is that the job market is steady, though consumers still showed some concerns about jobs in the latest consumer survey, Franco said. The government's latest report on employment showed that jobs bounced back in August, which eased fears that the economy might be slowing too much.

That sentiment was reflected in the stock market on Tuesday, when the Dow gained 93.58, or 0.81 percent, to close at 11,669.39. The Dow's advance put it within range of its high of 11,722.98 — set in January of 2000.

Copyright 2006 by The Associated Press. All Rights Reserved.