Jerry Clay shops at Macy’s on State Street in Chicago. A monthly survey finds consumers’ confidence in the economy surged to the highest level since April and is close to a post-recession peak. The component of the index reflecting the assessment of the job market improved in December.
Associated Press Enlarge
NEW YORK — Americans are gaining faith the economy is on the upswing.
An improving job outlook helped the Consumer Confidence Index soar to the highest level since April and near a post-recession peak, the Conference Board’s monthly survey found.
The Conference Board, a private research group, said Tuesday its Consumer Confidence Index rose almost 10 points to 64.5 in December, up from a revised 55.2 in November. Analysts had expected 59. The level is close to the post-recession high of 72, reached in February.
The December surge builds on a big increase in November, when the index rose almost 15 points from October. That month’s reading was the lowest since March, 2009, the depths of the recession.
One component of the index that measures how shoppers feel about the economy rose to 46.7 from 38.3 in November. The other barometer, which measures how shoppers feel about the next six months, rose to 76.4 from 66.4.
People’s assessment of the job market improved, according to preliminary results of the survey conducted Dec. 1-14. Those anticipating more jobs in the months ahead rose to 13.3 from 12.4 while those expecting fewer jobs fell to 20.2 percent from 23.8 percent.
Economists watch confidence numbers closely because consumer spending — including items such as health care — accounts for about 70 percent of U.S. economic activity.
The second-straight monthly surge coincided with a decent holiday shopping season for retailers, though stores had to heavily discount to attract shoppers.
Americans have more reason to be optimistic. The economy has produced at least 100,000 new jobs for five months in a row, the longest streak since 2006. The number of people applying for jobless benefits has dropped to the lowest level since April, 2008.
But confidence is far below where it is in a healthy economy. And Americans’ mood could sour if Europe’s debt crisis deepens and spreads to the United States. Shoppers face big obstacles: higher costs on household basics and a slumping housing market.
“This is encouraging. It’s good to be talking about improvement,” said Mark Vitner, a Wells Fargo economist. “But there is still a lot of room for trouble.”
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