The nation's economic recovery may appear slow in coming, but consumers are more upbeat heading into the new year. At least that's the latest assessment from the Conference Board, whose index of consumer confidence rose to 52.9 in December, up from a revised 50.6 last month, it reported Tuesday.%%DynaPub-Enhancement class="enhancement contentType-HTML Content fragmentId-1 payloadId-61603 alignment-right size-small"%% The rise was the second in as many months and was largely in line with analyst estimates of an increase to 53, compared to November's original reading of 49.5, according to Briefing.com. The index hit a historic low of 25.3 in February. It has since climbed, albeit not always smoothly, as rising unemployment has taken a toll on consumers.
While an improvement, December's number is still well short of 90, which signifies steady growth in the economy. A score of 100 or higher indicates strong growth. Consumer confidence is important to U.S. economic health, since household purchases account for about 70% of economic activity.
Mixed Feelings About the Labor Market
The news follows recent reports by retailers showing that sales during the important holiday shopping season were better than expected with a strong push just ahead of the Christmas holiday. Chain-store sales for the week ending Dec. 26 rose 2.3% from a year ago, according to a survey released Tuesday by the International Council of Shopping Centers and Goldman Sachs. For December, ICSC projects sales are on track to rise about 2%.
Another Conference Board measure, the expectations index, a measure of consumers' outlook during the next few months, rose to its highest level in two years to 75.6 from 70.3 last month. "A more optimistic outlook for business and labor market conditions was the driving force behind the increase in the expectations index," said Lynne Franco, director of the group's consumer research center. "Regarding income, however, consumers remain rather pessimistic about their short-term prospects, and this will likely continue to play a key role in spending decisions in early 2010," Franco said in a statement.
The survey of some 5,000 U.S. households also showed consumers had mixed feelings about the labor market. The percentage of consumers expecting more jobs to become available in the months ahead rose to 16.2% from 15.8%. Those claiming jobs are "hard to get" fell to 48.6% from 49.2%, while those claiming jobs are "plentiful" dropped to 2.9% from 3.1%. Earlier this month, a Labor Department report showed the nation's unemployment rate edged down slightly to 10% in November.
Slow Week on Wall Street
Tuesday's survey also showed that while sentiment about the job market in some measures improved, the percentage of consumers who expect their incomes will rise slipped to 10.3% from 10.9%, the Conference Board said.
The consumer confidence survey was released during a typically slow week on Wall Street as investors take time off ahead of the New Year holiday. Other data to be released this week include the Labor Department's latest figures for new unemployment claims on Thursday. December's employment situation report, which includes updated information about the numbers of unemployed workers, will be released Jan. 8.
Consumer Confidence Ends 2009 on a Rising Note