Confidence Inches Up, Consumers 'Wary'
January 7, 2008,
Defying market expectations, the Conference Board Consumer Confidence Index posted a slight increase in December after declining steadily for four consecutive months.
"This month's slight gain in confidence was due solely to an increase in the Expectations Index," said Lynn Franco, director of The Conference Board Consumer Research Center. "Consumers' short-term outlook regarding business conditions, employment, inflation and stock prices improved marginally."
Franco added that while consumers are less negative about the near-term future, they remain far from optimistic. "Furthermore, persistent declines in the Present Situation Index indicate the economy is still losing momentum. In fact, in assessing the current job market, pessimists now outnumber optimists. Regarding business conditions, the gap between the two is almost nonexistent."
Consumers claiming conditions are "good" decreased to 20.3% from 22.5%. Those saying conditions are "bad" increased to 20.0% from 18.9%. Consumers were also more wary about the job market. Those saying jobs are "hard to get" rose to 23.5% from 21.4%, while those claiming jobs are "plentiful" declined to 22.7% from 23.3% in November.
Consumers expecting business conditions to worsen in the next six months decreased to 14.1% from 16.6%. Those anticipating business conditions to improve increased to 13.8% from 12.4%.
The outlook for the labor market was also less pessimistic. The percent of consumers expecting more jobs in the months ahead inched up to 11.2% from 10.6%, while those anticipating fewer jobs edged down to 19.9% from 22.8%. The proportion of consumers expecting their incomes to increase in the months ahead decreased to 19.0% from 19.4%.