The Conference Board Consumer Confidence Index posted growth in December, rising to 109 from 105.3 last month, although the chances of a more upbeat 2007 are still up in the air, according to an economic analyst.
Consumers’ overall assessment of present-day conditions was more upbeat than in November, as the present situation index increased to 129.9 from 125.4. Those claiming conditions are “bad” decreased to 14.6 percent from 16.2 percent, while those saying conditions are “good” edged down to 27.2 percent from 27.5 percent. Labor market conditions also improved from last month, with consumers saying jobs are “hard to get” declining to 21.2 percent from 22.1 percent and those claiming jobs are “plentiful” increasing to 26.9 percent from 25.7 percent in November.
“Despite the latest improvement in the index, there is little to suggest that the pace of economic activity in the final quarter of 2006 is anything but moderately better than its uninspiring performance earlier this year,” said Lynn Franco, director of The Conference Board Consumer Research Center. “Given the see-saw pattern in recent months, it is too soon to tell if this boost in confidence is a genuine signal that better times are ahead.”
Consumers’ outlook for the next six months was more encouraging than in November, as evidenced in the expectation index’s gain to 95.1 from 91.9. Those anticipating business conditions to worsen decreased to 7.9 percent from 8.5 percent. Those expecting business conditions to get better increased slightly to 16.3 percent from 16 percent.
The outlook for the labor market improved moderately this month, as the percentage of consumers expecting more jobs to become available in the coming months edged up to 14 percent from 13.3 percent, while those anticipating fewer jobs edged down to 15.9 percent from 16.1 percent. The proportion of consumers expecting their incomes to increase in the months ahead declined to 19.6 percent from 22 percent in November.
The Consumer Confidence Survey is based on a representative sample of 5,000 U.S. households.