Consumer Confidence Climbs as Business Conditions and Job Availability Improve

Consumer confidence surged in December, reaching a level last seen in July. 

There was greater optimism in consumers’ assessments of both current business and labor market conditions and those they expect to see six months from now, The Conference Board said in a Wednesday (Dec. 20) press release. 

“December’s increase in consumer confidence reflected more positive ratings of current business conditions and job availability, as well as less pessimistic views of business, labor market and personal income prospects over the next six months,” Dana Peterson, chief economist at The Conference Board, said in the release. 

Overall, the Consumer Confidence Index reached 110.7 in December, up from a downwardly revised 101.0 in November, according to the release. 

The Present Situation Index rose to 148.5 from November’s 136.5, the release said. This improvement was driven by more positive views of both business conditions and the employment situation. 

The Expectations Index reached 85.6 in December, up from a downwardly revised 77.4 in November, per the release. This gain in optimism was driven by greater confidence about future business conditions, job availability and incomes. 

The share of consumers expecting interest rates to rise in the year ahead dropped to the lowest level seen since January 2021, according to the release. The share expecting stock prices to rise reached the highest level since the middle of 2021. 

Gains in optimism were seen across all ages and incomes levels, but they were largest among people between the ages of 35 and 54 and households with income levels of at least $125,000, according to the press release. 

“December’s write-in responses revealed the top issue affecting consumers remains rising prices in general, while politics, interest rates and global conflicts all saw downticks as top concerns,” Peterson said in the release. 

Another recent survey also found that consumer sentiment soared in December. 

The gains made during the month took consumer sentiment to a level that is 13% higher than it was in November and 16% above where it was a year ago, according to preliminary results from the University of Michigan Surveys of Consumers, released on Dec. 8. 

That survey attributed the rise in consumer sentiment to improvements in the expected trajectory of inflation. 

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