NEW YORK — The Consumer Confidence Index rose 9.3 points in December, getting a boost from consumers’ perception of an improved labor market.
According to the Conference Board, the index was 64.5 points in December, compared with 55.2 points last month. Both components of the index rose, with the present situation portion climbing to 46.7 from 38.3 and the expectations part increasing to 76.4 from 66.4.
Lynn Franco, director of The Conference Board Consumer Research Center, said, “After two months of considerable gains, the Consumer Confidence Index is now back to levels seen last spring [April 2011, 66.0]. Consumers’ assessment of current business and labor market conditions improved again. Looking ahead, consumers are more optimistic that business conditions, employment prospects, and their financial situations will continue to get better. While consumers are ending the year in a somewhat more upbeat mood, it is too soon to tell if this is a rebound from earlier declines or a sustainable shift in attitudes.”
Boosting confidence levels were improved assessments of the job market. Respondents said the job market was more positive, with those indicating jobs were “plentiful” rising to 6.7 percent from 5.6 percent, while those claiming jobs are “hard to get” declined to 41.8 percent from 43 percent. The outlook for the next six months was favorable too, as those anticipating more jobs ahead rising to 13.3 percent from 12.4 percent. Those expecting fewer jobs decreased to 20.2 percent from 23.8 percent. Consumers also said they expected a rise in their incomes, with 17.1 percent anticipating an increase, up from 14.1 percent last month.
Chris G. Christopher Jr., senior principal economist at IHS Global Insight, said, “Even though consumer confidence is gaining some ground, Americans face many hurdles, especially on the housing, employment and wage fronts. Wage gains are not keeping up with price increases, and the housing market is taking a major beating.”
He added that the fall in the unemployment rate to 8.6 percent in November and the decline in gasoline prices offered some relief to consumers. His firm is forecasting e-commerce retail sales of about $60 billion for the fourth quarter, with holiday sales overall rising 4.8 percent above last year’s $453 billion in sales. “This is a relatively good [confidence] report, especially at this time of year,” the economist concluded.
The confidence front didn’t help U.S. stocks, with the Dow Jones Industrial Average dipping slightly by 0.02 percent, or 2.65 points, to close at 12,291.35. However, the S&P Retail Index managed to inch up 0.2 percent, or 1.29 points, to 530.06, despite news from Sears Holdings Corp. that it would close between 100 and 120 Kmart and Sears full-line stores.
Many of the major overseas indices were closed on Tuesday. In Asia, the Nikkei 225 remained unchanged at 8,440.56 points. The Hong Kong stock market was closed due to a holiday. In Europe, Frankfurt’s DAX rose 0.2 percent, or 10.83 points, to 5,889.76. The CAC 40 in Paris gained 0.03 percent, or 1.02 points, to 3,103.11. The FTSE MIB in Milan was down 1 percent, or 149.98 points, to 14,924.01. The London exchange was closed due to a holiday.
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