Consumers were happy in December.
The Conference Board’s Consumer Confidence Index rose this month after a slip in November. The Index is now at 96.5, up from 92.6, with both components of the Index showing an uptick. The Present Situation Index rose to 115.3 from 110.9, while the Expectations Index is up to 83.9 from 80.4.
Lynn Franco, director of economic indicators at The Conference Board, said, “As 2015 draws to a close, consumers’ assessment of the current state of the economy remains positive, particularly their assessment of the job market. Looking ahead to 2016, consumers are expecting little change in both business conditions and the labor market. Expectations regarding their financial outlook are mixed, but the optimists continue to outweigh the pessimists.”
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One indicator that helped with December’s survey — the cutoff date for preliminary results was Dec. 15 — was consumers’ assessment of the labor front.
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Consumers in December were more positive about the labor market, with those claiming that jobs are “plentiful” rising to 24.1 percent from 21 percent in November. Further, those who said jobs are “hard to get” slipped to 24.7 percent from 25.8 percent.
The short-term outlook of those who responded to the survey was mixed, with the time frame generally a look ahead about six months out. Those who said they anticipate more jobs in the months ahead inched up to 12.9 percent from 12 percent. Those who said they expected fewer jobs fell to 16.6 percent from 18.5 percent.
Of the respondents in December’s survey, those aged 55 and over were less optimistic than consumers who gave their age as under 35. By household income, the most optimistic group were those who counted annual household income at between $100,000 and $125,000, followed by those earning $125,000 and over.
The most optimistic area is the Mountain region, which had a consumer confidence index of 112. The West North Central region came in second at 105.7. The least optimistic area was the Middle Atlantic region at 90.8.
According to Chris G. Christopher, Jr., director of consumer economics at IHS Global Insight, consumer confidence, which last month took a hit on worries over job prospects, made a comeback in December “due to falling pump prices, relatively strong employment reports and wages rising faster than consumer price increases.” He said consumers are “proceeding into the New Year more optimistic than this time last year.”
The economist is predicting that much of the increase in confidence is likely to come from the “low-income and middle-income households, due to lower energy prices and increasing real median household income.” He concluded that the “broadening income gains will assist in even more expansion of consumer spending over the next couple of years.”