U.S. consumer confidence strengthened in August as an improving job market outweighed rising gasoline prices, the Conference Board reported on Tuesday.

The Conference Board said its consumer confidence index rose in August to 105.6 from a revised 103.6 in July.

Analysts had predicted a decline in August to a reading of 101.5.

Consumers were buoyed by better employment prospects, with the index of “jobs plentiful” rising to 23.5% from 22.9% and the index saying jobs are hard to get easing to 23.2% from 23.8%. It was the first time since October 2001 that those claiming jobs were plentiful outnumbered those saying jobs were hard to get.

The research group’s present situation reading improved to 123.6 from 119.3 in July, its highest in nearly four years. The expectations index measure edged up to 93.7 from 93.2.

“Consumers appear to be weathering the steady rise in gas prices quite well,” said Lynn Franco, director of the Conference Board’s Consumer Research Center. “In fact, consumers’ confidence in the current state of the economy, and particularly in the labor market, has propelled the Present Situation Index to its highest level in nearly four years (125.4 in September 2001). Expectations continue to suggest more of the same for the remainder of this year.”


Meanwhile, the U.S. Commerce Department said new orders at U.S. factories in July suffered the largest drop since April 2004, though the decline was not as dramatic as expected. Demand for a wide array of long-lasting manufactured goods plunged.

New orders at U.S. factories fell 1.9% in July on a 4.9% fall in demand for durable goods, which are items expected to last at least three years. The fall was partially offset by a 1.7% increase in orders for non-durable goods. The durable goods figure was unchanged from an initial reading released last week.

Economists, taking into account the previously reported plunge in durable goods orders, had expected overall factory orders to drop 2.3%.