The Conference Board’s Consumer Confidence Index, which had increased last month, slipped in December. The Index now stands at 91.3 (1985=100), down from 92.5 last month. The Present Situation Index declined to 73.9 from 81. The Expectations Index, however, increased to 102.9 from 100.1.
“The improvement in consumers’ expectations signals healthy economic growth in 2004,” says Lynn Franco, director of The Conference Board’s Consumer Research Center. “But job worries continue. Consumers’ lackluster assessment of current conditions reflects continuing anxiety about labor market conditions. While consumers expect the job situation to improve in the months ahead, until a significant turnaround takes place, consumers’ optimism about current-day conditions will continue to lag behind their expectations.”
Consumers’ assessment of current labor market conditions deteriorated in December. Those saying jobs are “hard to get” rose to 32.6% from 29.6%. Those claiming jobs are “plentiful” declined to 12.5% from 13.5%. Consumers’ appraisal of current business conditions also lost ground, with those rating conditions as “good” decreasing to 18.7% from 19.9%. Those claiming conditions were “bad” rose to 24.4% from 23.6%.
But consumers’ short-term outlook remains upbeat. Those anticipating business conditions to pick up steam in the next six months rose to 26.8% from 24.5%. Consumers expecting conditions to worsen increased slightly to 8.1% from 7.2%.
The employment outlook also improved. Those anticipating more jobs to become available in the next six months increased to 21.7% from 18.5%. Those expecting fewer jobs to become available decreased to 16.9% from 18%. Consumers anticipating an increase in their incomes rose slightly to 20.7% from 20.2%.
The 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. NFO is one of TNS group of companies. The cutoff date for December’s preliminary results was Dec. 16.