Consumer confidence lags in area

Consumer confidence rose unexpectedly in May across the nation as a glowing job market and stock gains overshadowed high gasoline prices, the Conference Board reported yesterday in its closely watched monthly survey of consumer attitudes.

But in Pennsylvania, New Jersey and New York, consumers appeared to take a more dour outlook, as confidence fell to the lowest level in 2007, the group said.

The region, one of nine, ranked third from the bottom with a May reading of 90.2, down from 98.4 in April.

New England, at 74.6, and the Midwest manufacturing belt, which includes Ohio and Michigan, at 69.5, posted lower levels in May. The Midwest has suffered from cutbacks and restructurings at Detroit's Big Three automakers, which rely heavily on gas-guzzling SUVs and pickup trucks for profits.

The national consumer confidence level was 108 in May, up from 106 in April. A reading of 90 or higher indicates economic growth, while a reading below 80 suggests economic contraction. The index's baseline year is 1985, with a reading of 100.

Lynn Franco, director of the Conference Board Consumer Research Center, said job growth and wage growth were strong enough to offset record gasoline prices.

She said she did not believe that the lower confidence in the Mid-Atlantic area, which includes the Philadelphia region, was a concern because the survey considered only one month. The three-month moving average in the Mid-Atlantic was 93.6, which was higher than the three-month moving average of 89.5 a year earlier, she said.

Mark Zandi, chief economist with Moody's Economy.com, said he had expected national consumer confidence to fall in May because of gasoline prices. But the strong job market and rising stock prices appeared to have allayed consumers' fears, and it appears they will remain "sturdy spenders" and keep the economy moving, he said.

Zandi said the housing market in the Philadelphia area had "weakened a notch" this spring, which might explain why consumer confidence was lower than it was elsewhere. Overall, he said, the region is holding up "reasonably well."

The national unemployment rate in April was 4.5 percent, according to the federal government. It was 4.1 percent in Pennsylvania and New York and 4.3 percent in New Jersey.

Consumers with the most optimistic outlook in May were in mountain states such as Colorado, Wyoming and New Mexico, the Conference Board said. The region had a 138.2 index, up from 136.2 in April. The national and regional results are based on a survey of 5,000 households.