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Consumer Confidence Up in January

As Americans start the new year feeling better about the job situation, consumer confidence increased in January to its highest level in eight months.

The Consumer Confidence Index reading of 60.6 is up from 53.3 in December, the Conference Board reported today. The Present Situation Index - which gauges how consumers feel about the current state of the economy - improved to 31.0 from 24.9 in December. The Expectations Index - which shows how consumers feel about the likely conditions in the next six months - increased to 80.3 from 72.3 last month.

Lynn Franco, Director of The Conference Board Consumer Research Center said in a statement, “Consumers have begun the year in better spirits. As a result, the Index is now near levels not seen since last spring.”

Franco continued, “Consumers rated business and labor market conditions more favorably and expressed greater confidence that the economy will continue to expand and generate more jobs in the months ahead. Income expectations are also more positive. Although pessimists still outnumber optimists, the gap has narrowed.”

The indexes used to measure the opinions may have improved for January, but really, they’ve only improved very slightly from a drastically depressed view of the economy.

Only 9.8% of consumers surveyed thought that business conditions were “good” in January, but this was a slight increase from the 7.7% who felt that way in December. In both months, 40.4% of consumers felt business conditions were “bad.” And while we still have a way to go for the job market to be viewed with optimism, the trend appears to be shifting towards being “less negative” than it was in previous months.

Consumers who felt that jobs are “plentiful” in January rose 5.2% - up a bit from the 4.2% who felt that way in December. The percentage of consumers who felt jobs were “hard to get” fell to 43.4% in January from 46% in December. According to the survey, 19% of consumers expected business conditions to improve over the next six months, up from 16.8% who felt that way in December. Those expecting business conditions to worsen over the next six months fell to 11.3% in January from 11.8% in December.

Consumers also had better feelings about the job market. The percent of consumers who expected more jobs in the months ahead increased to 16% in January from 14.2% in the previous month. The percentage of consumers surveyed felt there would be fewer jobs available in the near future fell in January to 17.5% from 19.2%.

And consumers expecting an increase in their incomes rose to 11.4% from 9.9%. While this is indeed an increase, it is a tiny one. Put another way, only about one worker in ten expects a raise. They are probably counting their blessing to even have a job.

The Consumer Confidence Survey is conducted monthly by research company TNS on behalf of The Conference Board. The survey is based on 5,000 U.S. households and gauges consumers’ outlook on current and near-future business and labor conditions.

The Conference Board
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Sunday, 12 July 2020

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