Consumer Confidence Heads Upward in New Year

2014 is off to a solid start with an upturn in consumer confidence. That is according to the monthly Consumer Confidence Survey, based on a probability-design random sample, is conducted for the Conference Board by Nielsen.

After two months of decline in the wake of the partial government shutdown, the Conference Board has found that consumer confidence has bounced back to its highest level since September.

December’s index came in at 78.1, up from an upwardly revised figure of 72.0 in November and 72.4 in October.

“Consumer confidence rebounded in December and is now close to pre-government shutdown levels (September 2013, 80.2),” said Lynn Franco, director of economic indicators. “Sentiment regarding current conditions increased to a 5 ½ year high (April 2008, 81.9), with consumers attributing the improvement to more favorable economic and labor market conditions.”

“Looking ahead, consumers expressed a greater degree of confidence in future economic and job prospects, but were moderately more pessimistic about their earning prospects,” says Franco. “Despite the many challenges throughout 2013, consumers are in better spirits today than when the year began.”

The Present Situation Index increased to 76.2 from 73.5. This was predicated on a decrease in those claiming business conditions are “good,” but an even larger decrease in those claiming they were “bad.”

Consumers were also more optimistic about the availability of jobs. Those saying jobs are “plentiful” ticked up to 12.2 percent from 12.0 percent, while those saying jobs are “hard to get” decreased to 32.5 percent from 34.1 percent.

The Expectations Index was up at 79.4, compared to 71.1 last month. More consumers expect business conditions to improve over the next six months, and the number of those expecting them to worsen was down by nearly 2 percentage points.

The greatest gain was in the labor market outlook, with those anticipating more jobs in the months ahead increasing from 13.1% to 17.1%. The people anticipating fewer jobs decreased to 19% from 21.4%.

However, the proportion of consumers expecting their incomes to increase declined to 13.9 percent from 15.3 percent, while those expecting a decrease in their incomes declined to 14.0 percent from 15.5 percent.