NEW YORK — Americans were more optimistic in January, lifting the Consumer Confidence Index to 106.3, up from 103.8 in December and representing the highest level in more than 30 months.
Analysts and economists were expecting a 1.2-point gain to 105. The current level, the third month in a row that the Index has risen, now matches the Index in June 2002.
The Index comprises two components. The Present Situation Index rose to 128.4 last month from 120.7, while the Expectations Index slipped to 91.5 from 92.6 in December. The latter is a sign that consumers aren’t as optimistic regarding the longer-term outlook.
“[January’s] increase was driven solely by consumers’ assessment of current economic conditions, especially their more positive view of the job market,” said Lynn Franco, director of The Conference Board Consumer Research Center, in a statement.
Franco said that, while consumers rate current conditions more favorably than they have in more than four years, the improvement has not translated into greater optimism about the near-term future. “In fact, the gap between consumers’ assessment of current conditions and their expectations remains wide,” she added.
Stanley Officina, chief executive officer of Ultimate Financial Solutions, observed, “On the business side, we see retailers focused on straightening their own internal issues rather than trying to draw in new customers. It means that there’s not a lot of things going on to get consumers into the stores other than the same old stuff.”
Jim Rice, an analyst at Susquehanna Financial Group, said consumers may have been confident on the job front last month, but because of the survey’s Jan. 24 cutoff date, it may not have reflected current sentiment following the recent announcements from the big automakers and Kraft Foods involving either earnings or layoffs. “Sometimes the consumer confidence survey isn’t always reflective of what’s going on in terms of sales at the stores. I thought it would be more negative. As for the outlook six months from now, some consumers may have a lack of faith in the [federal] government’s ability to keep the economy percolating,” Rice predicted.
Generally, consumers’ assessments of present-day conditions were more favorable last month than in December. Consumers who said conditions were “good” rose to 25.8 percent to 24.4 percent, but those who said conditions were “bad” also increased to 16 percent from 14.9 percent.
Related Articles
You May Also Like
On the labor front, consumers who said jobs were “plentiful” rose to 26.9 percent from 23.3 percent, while those who said jobs were “hard to get” dropped to 20.3 percent from 22.5 percent.
Regarding the six-month outlook, consumers were less optimistic. Those expecting business conditions to worsen rose to 10.5 percent from 9.1 percent, while those who thought business conditions will improve dipped to 17.7 percent from 18.4 percent. On the labor front, consumers who expected more jobs to become available in the coming months edged down to 13.6 percent from 14.4 percent in December, the board said. Consumers who expected their incomes to increase in the months ahead also slipped to 19.8 percent from 21.3 percent.