NEW YORK — Consumers had almost every reason to be pessimistic last month, but that doesn’t necessarily spell doom and gloom for fashion retailing in the second half.

This story first appeared in the July 12, 2004 issue of WWD. Subscribe Today.

Prices at the gas pump were up nearly 30 percent from a year earlier. Fears abounded that a hike in interest rates would put an end to rampant refinancing. And the approaching presidential election, plus the impending handover of power in Iraq, created a cloud of uncertainty that might have caused shoppers to hold their wallets tightly.

But somehow, even as retail giants Wal-Mart and Target lowered their sales expectations, consumer confidence reached a two-year high during the final week of June. In fact, according to the June 2004 Surveys of Consumers by the University of Michigan, consumers have been more confident only 11 times in the past 52 years.

Such exuberance may signal that slumping retail sales are only temporary, some analysts say, and that consumers are more likely to be encouraged by new jobs and income growth than dismayed by staggering energy prices or the precarious state of the world.

“Our forecast shows that clothing will do well the second half of this year due to growth in employment and wages,” Richard T. Curtin, director of Surveys of Consumers, told WWD. “Because of rising interest rates, consumers will turn their attention away from houses and vehicles and more toward clothing.”

That can’t come soon enough for some U.S. chain stores, whose June sales were down 0.2 percent from May, according to a survey of 9,000 stores by Redbook Research. Retailers will slash prices in the coming weeks to move out their summer inventories, causing the researchers to predict that chain store sales will see a 0.7 percent increase compared with June.

And optimistic consumers appear ready to make that happen. The Consumer Confidence Index, a poll of 5,000 households by The Conference Board, reached 101.9, a level it hasn’t seen since June 2002. The number of respondents who believed jobs were “plentiful” rose to 18 percent, and 23.4 percent believed business conditions would improve.

“Consumers sense the world is their oyster, and the recent increase in Consumer Confidence shows it,” Richard Hastings, a retail analyst for Bernard Sands, wrote in a research note.

But perhaps consumer mood, positive as it may be, won’t necessarily impact spending patterns. Consumers might feel optimistic about jobs and wages, but that might not cause a rush to the checkout counter.

“What people say and what people do are two different things,” Dennis Fitzpatrick of First Investors Management told WWD. “A person reading the newspaper and feeling good about jobs may respond differently to a question than walking into a store and deciding to buy something.”

Indeed, many retailers are seeing little, if any, uptick, making these confident consumers seem downright fickle. For the week ended July 3, sales inched up 0.9 percent, up from a 1.2 percent decrease the prior week, the International Council of Shopping Centers and UBS stated in a joint report.

What’s worse, some studies aren’t even putting confidence very high. Siena College’s Research Institute in Albany’s quarterly survey showed that consumer confidence was lagging across New York State, dropping 2.5 points even in fashion-forward New York City.

“The economic news this past quarter has been mixed,” Douglas Lonnstrom, SRI director, wrote in the report. “Corporate earnings and employment are up, but they are offset by high energy prices and the potential for higher interest rates. As a result, buying plans are generally down, and we can’t seem to sustain a positive momentum.”

Specialty stores and large retailers alike — all of which have taken a beating due to unseasonably cold and damp weather across the country — will be closely watching whether higher consumer confidence will translate into higher sales.

“Consumer confidence is a good gauge,” Fitzpatrick said, “but it’s not so much what is said as what is done.”