The Conference Board Consumer Confidence Index®, which had increased in November, rose again in December. The Index now stands at 52.9 (1985=100), up from 50.6 in November. The Expectations Index increased to 75.6 from 70.3 last month. The Present Situation Index, however, declined to 18.8 from 21.2 in November.
Says Lynn Franco, Director of The Conference Board Consumer Research Center: "Consumer Confidence posted yet another moderate gain in December as expectations for the short-term future increased to the highest level in two years (Index 75.8, Dec. 2007). The Present Situation Index, however, continued to lose ground and remains at a 26-year low (Index 17.5, Feb. 1983). A more optimistic outlook for business and labor market conditions was the driving force behind the increase in the Expectations Index. Regarding income, however, consumers remain rather pessimistic about their short-term prospects and this will likely continue to play a key role in spending decisions in early 2010."
Consumers' assessment of current-day conditions declined further in December. Those claiming business conditions are "bad" increased to 46.6 percent from 44.5 percent, while those claiming conditions are "good" decreased to 7.0 percent from 8.1 percent. Consumers' appraisal of the job market was mixed. Those claiming jobs are "hard to get" decreased to 48.6 percent from 49.2 percent, while those claiming jobs are "plentiful" decreased to 2.9 percent from 3.1 percent.
Consumers' short-term outlook improved in December. Those anticipating business conditions will improve over the next six months increased to 21.3 percent from 19.7 percent, while those expecting conditions will worsen decreased to 11.9 percent from 14.6 percent.
The outlook for the labor market was also more upbeat. The percentage of consumers expecting more jobs to become available in the months ahead increased to 16.2 percent from 15.8 percent, while those expecting fewer jobs decreased to 20.7 percent from 23.1 percent. The proportion of consumers anticipating an increase in their incomes decreased to 10.3 percent from 10.9 percent.