Consumer confidence, which increased in November, rose again in December.
The Conference Board’s Consumer Confidence Index is now at 113.7, up from 109.4 last month. Consumers were more optimistic about the future than they were about the present. The Expectations Index, one component of the Consumer Confidence Index, jumped to 105.5 from 94.4. The Present Situation Index, the other part of the Consumer Confidence Index, fell to 126.1 in December from 132 in November.
Lynn Franco, director of economic indicators at The Conference Board, said, “Consumer confidence improved further in December, due solely to increasing Expectations, which hit a 13-year high.” The last time the Expectations Index was at a similar level was in December 2003 when it was at 107.4.
“The post-election surge in optimism for the economy, jobs and income prospects, as well as for stock prices, which reached a 13-year high, was most pronounced among older consumers,” Franco said. She said that looking ahead to 2017, whether there’s continued consumer optimism “will depend on whether or not their expectations are realized.”
As for current conditions, those who said business conditions were “good” fell to 29.2 percent from 29.7 percent. Their appraisal of the labor market was also less positive than last month, with those who said jobs are “plentiful” falling to 26.9 percent from 27.8 percent.
For the six-month outlook, those who said business conditions would improve rose to 23.6 percent from 16.4 percent. Their outlook for the labor front also improved, with those expecting more jobs increasing to 21 percent from 16.1 percent.
Further, the percentage of consumers who expect their incomes to increase over the next few months rose to 21 percent from 17.4 percent.
The monthly Consumer Confidence survey is conducted for The Conference Board by global information and analytics firm Nielsen. The cutoff date for preliminary results was Dec. 15.
According to data compiled by Nielsen for the December consumer confidence survey, the average inflation rate is 4.5 percent. Of those consumers who were surveyed, the majority had household income over $50,000, and many over $125,000.