The Present Situation Index continues to hold steady at a four-and-a-half year high (August 2001, 144.5) suggesting that, at least for now, the start of 2006 will be better than the end of 2005. However, consumers are growing increasingly concerned about the short-term health of the economy and, in turn, about job prospects. The Expectations Index is now at its lowest level in three years (March 2003, 61.4), excluding the two months following Hurricane Katrina. If expectations continue to lose ground, the outlook for the remainder of 2006 could deteriorate.
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