Consumer confidence snapped back in December according to the Conference Board, a New York-based research organization. The latest increase followed a decline in that survey in November. All told, the report registered a reading of 78.1, its highest level since September. The drop after that higher level of sentiment likely reflected the uneasiness resulting from the two-week government shutdown in the first half of October.
All told, the December result of 78.1 followed a revised 72.0 score last month, which had initially been estimated at 70.4. During September, confidence had been at 80.2. That earlier pickup had made it four months in a row in which confidence had topped 80. Thus, we are not yet at a peak for the year, or during the several-year-long economic recovery. There is thus further to go in building enthusiasm for the lengthening business recovery.
Moreover, the Present Situations Index, a component of the aggregate survey, also rose this month, climbing to 76.2 from 73.5 in November. The Expectations Index also improved, going from 71.1 to 79.4. This latter index tends to be somewhat higher than the others as the public is often more upbeat looking forward.
The cutoff data for this monthly survey was December 17th. According to Lynn Franco, the Director of Economic Indicators at the Conference Board: ''Consumer confidence rebounded in December and is now close to pre-government shutdown levels.'' Meantime, sentiment regarding current conditions has soared to a five-and-a-half-year high at 81.9. Looking ahead, consumers are more confident, as well.
Contributing to this latest uptick in consumer confidence was the labor market. To wit, those now anticipating more jobs being available in the months to come rebounded nicely this month, going from 13.1 to 17.1. Those anticipating fewer new positions dipped from 21.4 to 19.0. Thus, while there is no surge in optimism about the job market just yet, there is at least some slowly building optimism, and that is constructive.
Finally, we sense that the rapidly gaining stock market, which has seen 51 record closing highs in the 30-stock Dow Jones Industrial Average this year, is also playing a role in the generally improving level of consumer confidence. Taken as a whole, this survey was a reassuring economic release, and it furthers our expectation that 2013 ended on a reasonably good note for the economy and that 2014 will be a moderately better year, as well.
At the time of this article's writing, the author did not have positions in any of the companies mentioned.