US Consumer Confidence Climbs to Highest Level Since August: Conference Board
US consumer confidence in January rose to the highest level in five months, a sign economic recovery is fueling optimism in the consumer segment.
The Conference Board’s gauge of consumer confidence increased from 77.5 to 80.7 in January, topping estimates. The median forecast in a Reuters poll called for 78.1.
January marked the second consecutive month consumer sentiment rose. The assessment of the current situation continued to strengthen, largely due to a higher appraisal of the labour market. Nearly 22 percent of respondents described business conditions as being “good,” and 12.7 percent said jobs are “plentiful.” While job creation in December was much weaker than forecast, the unemployment rate plunged to a five-year low, as disgruntled job-seekers exited the market. Market research data released this week suggest the US economy added around 200,000 jobs in January.
Consumers’ expectations also increased in January, albeit at a slower rate than the previous month. Consumers’ outlook on the labour market, however, was much more mixed. Those expecting to see more jobs in the months ahead fell from 17.1 percent to 15.4 percent. On the other hand, consumers expecting to see fewer jobs decreased from 19.4 percent to 18.3 percent.
“Looking ahead six months, consumers expect the economy and their earnings to improve, but were somewhat mixed regarding the outlook for jobs,” said the Conference Board’s Lynn Franco. “All in all, confidence appears to be back on track and rising expectations suggest the economy may pick up some momentum in the months ahead.”
Steady consumer confidence bodes well for the US economy. Separate data from the Commerce Department today showed durable goods orders fell at the end of last year, raising concern business investment could decline in early 2014. The Commerce Department will release official fourth quarter GDP estimates Thursday. Thomson Reuters and the University of Michigan will release their own report on consumer confidence Friday.
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