According to the Conference Board Consumer Confidence Index, shoppers visited stores in December expecting good things even if they weren’t necessarily experiencing good things.
The index reached 113.7, up from an already strong 109.4 in November. Of the two studied components, the Expectations Index gained sharply from 94.4 to 105.5. However, the Present Situation Index decreased from 132 last month to 126.1.
The proportion of consumers surveyed for the index who said business conditions are good decreased slightly from 29.7% to 29.2%, yet those saying business conditions are bad increased from 15.2% to 17.3%. At the same time the proportion of consumers who said jobs are plentiful decreased from 27.8% to 26.9%, while those claiming jobs are hard to get increased from 21.2% to 22.5%.
Survey respondents expecting business conditions to improve over the next six months increased from 16.4% to 23.6%, while those expecting business conditions to worsen declined from 9.9% to 8.7%.
The consumer take on the labor market brightened, as the proportion of consumers expecting more jobs in the months ahead increased from 16.1% to 21%. However, those anticipating fewer jobs also increased, from 13.5% to 14%. The percentage of consumers expecting their incomes to increase rose from 17.4% to 21%, while the proportion expecting a decrease fell from 9.2% to 8.6%.
“Consumer confidence improved further in December, due solely to increasing expectations, which hit a 13-year high,” said Lynn Franco, director of economic indicators at The Conference Board. “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. Consumers’ assessment of current conditions, which declined, still suggests that economic growth continued through the final months of 2016. Looking ahead to 2017, consumers’ continued optimism will depend on whether or not their expectations are realized.”
