Consumer Confidence rises in December
The Conference Board reported that its latest Consumer Confidence Index increased in December to 110.7 (1985=100), up from a downwardly revised 101.0 in November.
The Present Situation Index. based on consumers’ assessment of current business and labor market conditions, rose to 148.5 (1985=100) from 136.5 last month.
The Expectations Index, based on consumers’ short-term outlook for income, business, and labor market conditions, leaped to 85.6 (1985=100) in December, up from its downwardly revised reading of 77.4 in November.
This sharp increase brings expectations back to the levels of optimism last seen in July of this year, the Conference Board said.
“December’s increase in consumer confidence reflected more positive ratings of current business conditions and job availability, as well as less pessimistic views of business, labor market, and personal income prospects over the next six months,” said Dana Peterson, chief economist at the Conference Board. “While December’s renewed optimism was seen across all ages and household income levels, the gains were largest among householders aged 35-54 and households with income levels of $125,000 and above.”
Peterson noted that the top issues affecting consumers remain rising prices in general, while politics, interest rates, and global conflicts all saw downticks as top concerns.
The Conference Board also said Consumers’ “Perceived Likelihood of a US Recession over the Next 12 Months” abated in December to the lowest level seen this year—though two-thirds still perceive a downturn is possible in 2024.
“Assessments of the present situation rose in December, as seen by the more positive views of business conditions and the employment situation,” Peterson added. “By contrast, when asked to assess their current family financial conditions (a measure not included in calculating the Present Situation Index), the proportion reporting “good” ticked down while those saying “bad” rose slightly. This suggests consumers’ view of their current finances may paint a more tempered picture than the perception that overall conditions are better than a month ago.”
