Consumer confidence jumps more than eight points

The Conference Board’s Consumer Confidence Index, which had declined dramatically over the past three months, rebounded in December. The Index now stands at 93.7 (1985=100), up from 84.9 in November. The Expectations Index rose sharply, from 77.3 to 91.5. The Present Situation Index increased slightly, from 96.2 to 96.9.

“The deterioration in current economic conditions appears to be reaching a plateau, led by a stabilizing employment scenario,” says Lynn Franco, Director of The Conference Board’s Consumer Research Center. “Consumers’ short-term optimism is no longer at recession levels, and the upward trend signals that the economy may be close to bottoming out and that a rebound by mid-2002 is likely.”

Consumers’ appraisal of current economic conditions was slightly more positive than last month. Consumers rating conditions as “good” increased from 16.8% to 17%, The Conference Board reported. However, those rating current business conditions as “bad” rose from 20.7% to 21.7%. Those reporting jobs were plentiful edged up from 17.5% to 17.6%. Those claiming jobs were “hard to get” declined from 22.7% to 21.8%.

Consumers are more optimistic about economic prospects six months from now, The Conference Board reported. Those expecting an improvement in business conditions increased from 17.7% to 22.2%. Those anticipating conditions to worsen declined from 16.9% to 11.6%.

The employment outlook was also more positive, according to the data. Currently, 16.1% of consumers expect more jobs to become available in the next six months, up from 14.4% last month. Those expecting fewer jobs to become available decreased from 26.3% to 19.3%. Regarding income expectations, 20.7% of consumers anticipate a gain, down from 22% in November.

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, a member of The Interpublic Group of Companies.