Short-term outlook buoys consumer confidence in December
Consumer confidence reached another post-recession high in December as the stock market soared to a new record after the election of Donald Trump and the outlook for the job market remains robust.
The Conference Board said Tuesday its consumer confidence index increased to 113.7 in December from an upwardly revised 109.4 in November.
“The post-election surge in optimism for the economy, jobs and income prospects, as well as for stock prices which reached a 13year high, was most pronounced among older consumers,” said Lynn Franco, director of economic indicators at the Conference Board, a non-profit business research organization.
Much of the confidence boost came from expectations that short-term economic conditions will improve.
The Expectations Index, which measures consumers’ outlook for the next six months, rose sharply from 94.4 in November to 105.5, a 13-year high.
Consumers who expect business conditions to improve in the next six months increased to 23.6% from 16.4%. Those expecting business conditions to worsen declined from 9.9% to 8.7%.
But consumers’ assessment of current conditions declined in December. The Present Situation Index fell to 126.1 from 132.0 in November. Consumers who said business conditions are “good” fell to 29.2% from 29.7%. Those saying business conditions are “bad” increased to 17.3% from 15.2%.
Consumers generally remain optimistic about labor market strength. Those expecting more jobs in the coming months increased from 16.1% to 21%. But those expecting fewer jobs also rose to 14% from 13.5%.
Consumers also expect their incomes to continue to grow. The percentage of consumers expecting rising incomes increased to 21% from 17.4% in November. Consumers expecting a cut in their incomes declined to 8.6% from 9.2%.