Consumer Confidence Ends Year on High Note

The Conference Board Consumer Confidence Index, which had increased in November, rose another 2.3% in December. The index now stands at 52.9, up from 50.6 in November.

The Expectations Index increased to 75.6 from 70.3 last month, but the Present Situation Index declined to 18.8 from 21.2 in November, and remains at an all-time low.

“A more optimistic outlook for business and labor market conditions was the driving force behind the increase in the Expectations Index,” said Lynn Franco, Director of The Conference Board Consumer Research Center, in a statement.

But regarding income, Franco said 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% from 44.5%, while those claiming conditions are “good” decreased to 7.0% from 8.1%. Consumers’ appraisal of the job market was mixed. Those claiming jobs are “hard to get” decreased to 48.6% from 49.2%, while those claiming jobs are “plentiful” decreased to 2.9% from 3.1%.

Consumers’ short-term outlook improved in December. Those anticipating business conditions will improve over the next six months increased to 21.3% from 19.7%, while those expecting conditions will worsen decreased to 11.9% from 14.6%.

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% from 15.8%, while those expecting fewer jobs decreased to 20.7% from 23.1%. The proportion of consumers anticipating an increase in their incomes decreased to 10.3% from 10.9%.

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