Consumer confidence rises higher than expected
AP Retail Writer
CHICAGO – Consumer confidence rose past expectations in January, the third straight monthly increase as Americans begin to feel slightly better about business conditions and the job picture, according to a survey released Tuesday.
The Conference Board’s Consumer Confidence Index increased to 55.9 – the highest in more than a year but still relatively gloomy. That compares with 53.6 in December.
January’s index was better than the expected 53.5 forecast by economists.
Economists watch confidence numbers closely because consumer spending accounts for about 70 percent of U.S. economic activity. It takes a reading of 90 to indicate an economy on solid footing and 100 or more to indicate growth.
The new figures still don’t point to an end to the nation’s economic woes any time soon.
“Consumers’ short-term outlook, while moderately more positive, does not suggest any significant pickup in activity in the coming months,” Lynn Franco, director of The Conference Board’s Consumer Research Center, said in a statement.
Tuesday’s figures are based on a survey of 5,000 households by the private research group.
While consumers were less dire about their income prospects, “pessimists continues to outnumber the optimists,” Franco said.
Job security is a vital part of how Americans view the economy. Those who feel better about their jobs feel more comfortable spending money, which in turn fuels the nation’s economy. That means without a meaningful and steady increase in Americans’ faith that their paychecks will keep coming there’s unlikely to be any strong revival in the economy.
The unemployment rate held steady in December at 10 percent, down slightly from a 26-year high of 10.2 percent in October. Some analysts worry it will start climbing again in coming months, and could even rise as high as 10.5 percent next summer.
The Consumer Confidence index hit a historic low of 25.3 in February after registering 37.4 last January and enjoyed a three-month climb from March through May, fueled by signs that the economy might be stabilizing.
Since June, it has bounced along anemically between 47 and 55 as rising unemployment has taken a toll.