Consumer Outlook Brightens Slightly

Mixed Results in Shorter Month

Don Hogsett, January 8, 2007

With Americans feeling somewhat better about the job market, consumer confidence ticked up by 3.5% during December after running in place the month before, The Conference Board reported.

But sending out another tricky, mixed signal, the number wasn't all that it appeared. Indeed, five of the nation's nine regions recorded a drop in confidence levels. And the overall number was pushed higher on the strength of an unusually strong gain of 15.6% in just one part of the country, the East North Central states. Elsewhere, the gains were slight to negligible, up 1.7% in the South Atlantic; up 0.2% in the Pacific; and up 0.1% in the mountain States.

Buying plans were similarly mixed, with plans to buy a home slipping by 6.3%; plans to buy a major appliance off by 7.0%, despite a jump in plans to buy a new TV for Christmas; and plans to take a vacation during the next six months dipping by 2.2%. The two gainers were cars, up 3.8%; and plans to buy a carpet, up 2.2%.

"Despite the latest improvement in the index, there is little to suggest that the pace of economic activity in the final quarter of 2006 is anything but moderately better than its uninspiring performance earlier this year," said Lynn Franco of The Conference Board. "Given the see-saw pattern in recent months, it is too soon to tell if this boost in confidence is a genuine signal that better times are ahead."

A bright spot was the jobs outlook, with the number of consumers who say jobs are hard to get declining to 21.2% from 22.1% a month ago. Consumers' overall assessment of current conditions was more upbeat, with the number saying conditions are bad decreasing to 14.6% from 16.2%. But at the same time, the number who say conditions are good edged down to 27.2% from 27.5%.

Buying plans in December
Plans to purchase over the next six months

Source: The Conference Board
Homes -6.3
Carpets 6.7
Major appliances -7.0
Cars 3.8
Vacation -2.2

Confidence by region

Region % change
Source: The Conference Board
New England -5.9
Middle Atlantic -2.9
East North Central 15.6
West North Central -4.4
South Atlantic 1.7
East South Central -3.5
West South Central -2.8
Mountain Pacific 0.2

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