Although improving job market conditions boosted consumer confidence in January, the outlook for the next six months grew weaker, The Conference Board reported today.
“This month’s slight increase in confidence was solely the result of an improvement in the present situation index, fueled primarily by a more favorable job market,” said Lynn Franco, director of The Conference Board Consumer Research Center, in a statement. “Looking ahead, however, consumers are not as optimistic as they were in December. All in all, the Index suggests a moderate improvement in the pace of growth in early 2007.”
According to the consumer confidence index, which edged up from 110 in December to 110.3 this month, consumers’ overall assessment of current-day conditions was more upbeat than in December. Those claiming conditions are “good” increased to 28.1 percent from 27.4 percent, while fewer people (19.7 percent) say jobs are “hard to get” this month and more people (29.9 percent) claim jobs are “plentiful.”
While the present situation index increased to 133.9 this month, the expectations index fell to 94.5, as the outlook for business conditions and the labor market cooled.
Those consumers anticipating business conditions to worsen edged up to 8 percent this month, and those expecting business conditions to get better decreased slightly to 16.2 percent. On the job front, those anticipating fewer jobs in the coming months edged up to 15.7 percent from 15.5 percent in December. The proportion of consumers expecting their incomes to increase in the months ahead declined to 19.8 percent from 21.4 percent in December.
The Consumer Confidence Survey is based on a representative sample of 5,000 U.S. households.