Consumer Confidence Jumps to Highest Level Since 2001
Consumer confidence climbed in December to the highest level since August 2001 as Americans were more upbeat about the outlook than at any time in the last 13 years, according to a report Dec. 27 from the New York-based Conference Board.
Key Points
• Confidence index increased to 113.7 (forecast was 109) from a revised 109.4 in November.
• Measure of consumer expectations for the next six months rose to 105.5, the highest since December 2003, from 94.4.
• Present conditions index fell to 126.1 from 132.
• Share of Americans expecting better business conditions six months from now rose to 23.6%, the highest since February 2011, from 16.4%.
Big Picture
American households are expecting a Donald Trump administration to deliver. They are more upbeat about the prospects for the economy, labor market and their incomes, according to the Conference Board’s report. The results corroborate surveys by the University of Michigan and the National Federation of Independent Business, which showed jumps in household and business sentiment on Trump’s pledges to boost jobs, cut taxes and ease regulations.
Economist Takeaways
“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,” Lynn Franco, director of economic indicators at the Conference Board, said in a statement. “Looking ahead to 2017, consumers’ continued optimism will depend on whether or not their expectations are realized.”
The Details
• Share of those who said they see more job availability six months from now rose to 21%, the highest since February 2011, from 16.1%.
• Labor differential, which measures the difference between those saying jobs are currently plentiful and hard to get, fell to 4.4 points from 6.6 points.
• Share of respondents who expected their incomes to rise in the next six months rose to 21% from 17.4%.
• The difference in the share expecting incomes to increase and those anticipating they will fall was 12.4 points, the widest since January 2007.
• Share expecting stock prices to be higher in the next year surged to 44.7%, the most upbeat reading since January 2004.
• Sentiment rose among 35- to 54-year-olds, and was the highest since July 2007 among Americans 55 and older; confidence fell among those 35 and younger.
• More Americans reported plans to purchase automobiles and major appliances.
