The consumer is confident.
The Conference Board’s consumer confidence index surged to 102.9 in January from 93.1 a month ago.
This was much stronger than the 95.5 expected by economist.
“Consumer confidence rose sharply in January, and is now at its highest level since August 2007 (Index, 105.6),” the Conference Board’s Lynn Franco said. “A more positive assessment of current business and labour market conditions contributed to the improvement in consumers’ view of the present situation. Consumers also expressed a considerably higher degree of optimism regarding the short-term outlook for the economy and labour market, as well as their earnings.”
This comes amid falling unemployment rates, tumbling gas prices, resilient stock prices, and rebounding home prices.
Here’s some more colour from the Conference Board:
Consumers’ assessment of present-day conditions was considerably more favourable in January than in December. Those saying business conditions are “good” increased from 24.7 per cent to 28.1 per cent, while those claiming business conditions are “bad” decreased from 18.9 per cent to 16.8 per cent. Consumers were also much more positive in their assessment of the job market. Those stating jobs are “plentiful” increased from 17.2 per cent to 20.5 per cent. Those claiming jobs are “hard to get” decreased from 27.3 per cent to 25.7 per cent.
Consumers’ optimism about the short-term outlook improved in January. The percentage of consumers expecting business conditions to improve over the next six months rose from 17.8 per cent to 18.4 per cent, while those expecting business conditions to worsen declined from 9.9 per cent to 7.7 per cent.
Consumers’ outlook for the labour market was also more optimistic. Those anticipating more jobs in the months ahead increased from 14.6 per cent to 16.7 per cent, while those anticipating fewer jobs declined from 16.5 per cent to 15.0 per cent. The proportion of consumers expecting growth in their incomes improved from 16.2 per cent to 20.0 per cent. However, the proportion expecting a decrease increased marginally, from 10.2 per cent to 11.3 per cent.