WASHINGTON, Sept 30, 2008 (AFP) - Battered US consumer confidence edged higher in September for the third consecutive month, led by hopes for better economic times in the coming months, the Conference Board reported Tuesday.

The business research firm said its consumer confidence index rose to 59.8 from 58.5 in August, revised higher from a prior estimate of 56.9.

The September improved reading confounded analysts' consensus forecast of a decline to 55.0, but still remained weak on the index based on a 1985 reading of 100.

The index fell in the first six months of the year to 51.0 in June before rising modestly in the following three months.

The Conference Board's research director, Lynn Franco, said the September increase was due 'solely' to an improvement in the short-term outlook but cautioned that the preliminary data did not reflect fully the current financial turmoil.

'These results did not capture all of the tumultuous events in the financial sector this month, and until the dust settles a bit more, we will not know the full impact on consumers' expectations,' Franco said in a statement.

'Shocks, such as the 1987 crash, generally tend to have a temporary adverse effect on confidence, lasting on average two to four months, unless they result in significant job losses,' she said.

The cutoff date for the survey of 5,000 households was September 23.

Confidence, a bellwether of consumer spending, which accounts for two-thirds of US economic growth, had eroded this year amid a housing meltdown and credit squeeze, before a modest rebound in July.

According to the September survey, consumers' evaluation of the present situation decreased to 58.8 from 65.0 last month.

'Consumers' assessment of current conditions continues to indicate that the current economic environment remains quite weak,' Franco said.

However, the forward-looking expectations index increased to 60.5 from 54.1 in August.