Jan. 28 --Confidence among U.S. consumers unexpectedly climbed to a five-month high in January as optimism about the economy and the labor market improved, the Conference Board said Jan. 28.
The New York-based private research group's index advanced to 80.7 from a revised 77.5 in December that was weaker than initially estimated.
More Americans than at any time since August 2008 said jobs were currently plentiful, and the share of those viewing business conditions as good was the highest in more than six years, the Conference Board report showed.
Analysts said bigger employment gains, which lead to more wage growth, would help provide a further boost to confidence and drive the consumer purchases that account for almost 70 percent of the economy.
“One would expect an acceleration in spending momentum going into 2014,” said Millan Mulraine, deputy head of U.S. research and strategy at TD Securities USA LLC, who projected a confidence reading of 80.2.
“You'd probably want to see these numbers being sustained over the next few months for you to believe that it will be reflected in spending habits,” he said.
The median projection in a Bloomberg survey of 79 economists called for 78.0 in the consumer confidence index, little changed from an initial December reading of 78.1. The index averaged 53.7 in the recession that ended in June 2009.
In January, the Conference Board's present conditions barometer increased to 79.1, the highest since April 2008, from 75.3.
Consumers' assessments of current labor-market conditions improved. The share of respondents who said jobs were hard to get eased to 32.6 percent from 32.9 percent in December.
The difference between those who said jobs were hard to get and respondents who said employment opportunities were plentiful was the smallest since September 2008.
The Labor Department's December employment report, which was released Jan. 10, showed 74,000 jobs were added to payrolls during the month, the fewest since January 2011, while the jobless rate fell to 6.7 percent, a five-year low (7 DLR D-1, 1/10/14).
The Conference Board's measure of consumer expectations for the next six months rose to a four-month high of 81.8 from 79.0 the month before.
The share of consumers who expected their incomes to increase climbed to 15.8 percent from 13.9 percent. At the same time, the proportion of Americans who said jobs would become more plentiful in the next six months declined.
“Looking ahead six months, consumers expect the economy and their earnings to improve, but were somewhat mixed regarding the outlook for jobs,” Lynn Franco, director of economic indicators at the Conference Board, said in a statement. “All in all, confidence appears to be back on track and rising expectations suggest the economy may pick up some momentum.”
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Information about the consumer confidence report is available at http://www.conference-board.org/data/consumerconfidence.cfm.
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