Consumer confidence increases to higher-than-expected level in January
Tuesday, January 31st 2006, 10:07 am
By: News On 6
NEW YORK (AP) _ Americans became more optimistic about the economy in January, sending a widely followed measure of consumer confidence to the highest level in about three and a half years, a private research group said Tuesday.
The Conference Board said that its consumer confidence index rose to 106.3, the highest level since June 2002, when the reading was also 106.3. The latest reading was up from a revised 103.8 in December. Analysts had expected a reading of 105.0 in January.
``This month'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.
But she added that while consumers rate current conditions more favorably, the improvement has not translated into greater optimism about the six-month outlook.
The component of the index that assesses consumers' views of current economic conditions rose to 128.4 from 120.7. But another component that measures consumers' outlook over the next six months slipped to 91.5 from 92.6 in December.
Economists closely track consumer confidence because consumer spending accounts for two-thirds of all U.S. economic activity.
The Conference Board index is derived from responses received through Jan. 24 to a survey mailed to 5,000 households in a consumer research panel. The figures released Tuesday include responses from at least 2,500 households.
Overall, consumers' assessment of present-day conditions was more favorable in January than in December. Consumers claiming conditions are ``good'' increased to 25.8 percent from 24.4 percent. Those claiming conditions are ``bad,'' however, also increased to 16.0 percent from 14.9 percent.
Labor market conditions continued to improve. Consumers saying jobs are ``plentiful'' rose to 26.9 percent from 23.3 percent, while those saying jobs are ``hard to get'' decreased to 20.3 percent from 22.5 percent.
Consumers' outlook for the next six months was more tempered in January than in December. Those expecting business conditions to worsen increased to 10.5 percent from 9.1 percent, while those expecting business conditions to improve declined to 17.7 percent from 18.4 percent.
The outlook for the labor market was mixed. Those expecting more jobs to become available in the coming months edged down to 13.6 percent from 14.4 percent in December, while those expecting fewer jobs declined to 15.5 percent from 17.7 percent.