The Conference Board Consumer Confidence Index, which had increased in December, improved further in January. The Index now stands at 106.3 (1985=100), up from 103.8 in December. The Present Situation Index rose to 128.4 from 120.7. The Expectations Index declined to 91.5 from 92.6 last month.
“Consumer Confidence is now at its highest level in more than three years (June 2002, 106.3),” says Lynn Franco, director of The Conference Board Consumer Research Center. “This month’s increase was driven solely by consumers’ assessment of current economic conditions, especially their more positive view of the job market. But while consumers rate current conditions more favorably than they have in more than four years (Aug. 2001, 144.5), the improvement has not translated into greater optimism about the near-term future. In fact, the gap between consumers’ assessment of current conditions and their expectations remains wide.”
Overall, consumers’ assessment of present-day conditions was more favorable in January than in December. Consumers claiming conditions are “good” increased to 25.8 percent from 24.4 percent. Those claiming conditions are “bad,” however, also increased to 16 percent from 14.9 percent. Labor market conditions continued to perk up. Consumers saying jobs are “plentiful” rose to 26.9 percent from 23.3 percent, while those claiming jobs are “hard to get” decreased to 20.3 percent from 22.5 percent.
Consumers’ outlook for the next six months was somewhat more subdued in January than in December. Those expecting business conditions to worsen increased to 10.5 percent from 9.1 percent, while those expecting business conditions to improve declined to 17.7 percent from 18.4 percent.
The outlook for the labor market was mixed. Those expecting more jobs to become available in the coming months edged down to 13.6 percent from 14.4 percent in December, while those expecting fewer jobs declined to 15.5 percent from 17.7 percent. The proportion of consumers anticipating their incomes to increase in the months ahead eased to 19.8 percent from 21.3 percent last month.
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 TNS. The cutoff date for January’s preliminary results was Jan. 24.