Consumer Confidence Surges in December

December 28, 2004

Consumer Confidence Surges in December

The Conference Board's Consumer Confidence index jumped nearly 10 points to 102.3 in December from 92.6 in November, says the Associated Press. It reversed four months of declines and reached the highest level since July, reported the Conference Board, a New York City-based business information group, and well above the level of 94 investors expected.

The upbeat reading ends the year on a high note and bodes well for consumer spending going into 2005. The indicator of consumer confidence is widely watched by economists since spending by individuals makes up about two-thirds of all economic activity in the United States.

The monthly report on consumer confidence is based on a survey of 5,000 U.S. households, and the preliminary figure for December reported Dec. 28 was based on the roughly 2,700 responses received by Dec. 20.

The survey found consumer outlooks for the next six months were more upbeat than the month before. Respondents saying they expected business conditions to improve rose to 22% from 20.3%, while those saying they expected conditions to worsen fell to 7.7% from 11.4%. Those saying they believed business conditions were good rose to 24.4% from 23.2%, while those saying they were bad fell to 17.8% from 20.2%.

The survey's reading of the labor market also improved in December. The percentage of respondents saying jobs are plentiful rose to 19.4% from 17.1%, while those saying jobs were hard to get fell to 26.4% from 28.0%. The outlook for jobs also improved. Those saying they expected fewer jobs to become available in the coming months declined to 15.5% from 19.3%. However, those saying they expected more jobs to become available slipped to 16.2% from 17.6%.

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