The Conference Board’s Consumer Confidence Index rose for the second consecutive month in January. The Index now stands at 97.3 (1985=100), up nearly three points from 94.6 in December.
The Expectations Index rose from 92.4 to 96.9. The Present Situation Index remained unchanged at 97.8.
“While the economy has not turned around yet, the worst may well be over,” says Lynn Franco, director of The Conference Board’s Consumer Research Center. “The upturn in confidence is being driven by growing confidence about the business outlook and job prospects. Consumer expectations for the future are now higher than they have been in more than a year.”
Consumers are more upbeat about economic prospects six months from now. Those expecting an improvement in business conditions rose to 25%, up from 22.2% in December. Those anticipating conditions to worsen fell to 9.6%, down from 11.6%.
Consumers’ appraisal of current conditions is mixed. Those rating conditions as “good” increased from 17.3% to 18.4%. But consumers labeling current business conditions as “bad” rose from 21.7% to 22.4%. Consumers reporting jobs are plentiful increased from 17.9% to 18.4%. But those claiming jobs were “hard to get” rose from 21.9% to 22.7%.
The employment outlook is also improved. Currently, 18.8% of consumers expect more jobs to become available during the next six months, up from 16.5% last month. Those expecting fewer jobs dipped from 19.3% to 18.2%. But fewer consumers expect their paychecks to increase – 19% in January, down from 21.5% in December.
The Conference Board’s Consumer Confidence Survey is based on a representative sample of 5,000 U.S. households. The monthly survey is conducted for The Conference Board by NFO WorldGroup, a member of The Interpublic Group of Companies (NYSE: IPG).