Consumer Confidence Upbeat In January, Supports Economy’s Early 2020 Growth
Consumer sentiment started 2020 off on a positive note, with the Conference Board Consumer Confidence Index showing an increase in January. Consumer confidence also increased in December. The Index now stands at 131.6, up from 128.2 in December. The monthly Consumer Confidence Survey, based on a probability-design random sample, is conducted for The Conference Board by Nielsen.
“Consumer confidence increased in January, following a moderate advance in December, driven primarily by a more positive assessment of the current job market and increased optimism about future job prospects,” says Lynn Franco, senior director, economic indicators, at The Conference Board. “Optimism about the labor market should continue to support confidence in the short term and, as a result, consumers will continue driving growth and prevent the economy from slowing in early 2020.”
The Conference Board’s Present Situation Index—based on consumers’ assessment of current business and labor market conditions—increased from 170.5 to 175.3. The Expectations Index—based on consumers’ short-term outlook for income, business and labor market conditions—increased from 100 last month to 102.5 this month.
Consumers’ outlook on current conditions improved in January. Those describing business conditions as “good” increased from 39 percent to 40.8 percent, while those claiming business conditions are “bad” decreased from 11 percent to 10.4 percent. Consumers’ assessment of the job market also improved. Those saying jobs are “plentiful” increased from 46.5 percent to 49 percent, while those claiming jobs are “hard to get” declined from 13 percent to 11.6 percent.
Consumers were also more optimistic about the short-term outlook. The percentage of consumers expecting business conditions to improve over the next six months was unchanged at 18.8 percent, while those expecting business conditions to worsen declined from 8.8 percent to 8.4 percent.
Expectations on the labor market were upbeat in January. The share of consumers expecting more jobs in the months ahead increased from 15.5 percent to 17.2 percent, while those anticipating fewer jobs declined from 13.9 percent to 13.4 percent. Regarding their short-term income prospects, the percentage of consumers expecting an improvement declined from 22.7 percent to 22 percent, while the proportion expecting a decrease was virtually unchanged at 7.7 percent.