Consumer confidence slips, but 2011 growth still forecast
A monthly measure of consumer confidence has declined, but doesn’t reflect a substantial change from already guarded expectations for moderate growth.
“Consumer confidence is no worse off today that it was a year ago. Consumers’ assessment of the current state of the economy and labor market remains tepid and their outlook remains cautious,” said Lynn Franco, director of the Conference Board Consumer Research Center.
The Conference Board, a business research and membership group, reported that its Consumer Confidence Index (CCI) fell nearly two points to 52.5 in December.
Despite the decrease, Franco said the index still forecasts growth. “All signs continue to suggest that the economic expansion will continue well into 2011, but that the pace of growth will remain moderate.”
The CCI is based on the results of monthly surveys of 5,000 U.S. households. Economists monitor the index because consumer spending accounts for two-thirds of all economic activity in the country.
For December, components of the CCI measuring assessments of current business and labor conditions as well as the outlook for the next six months each declined nearly two points. The Present Situation Index fell to 23.5. The Expectations Index fell to 71.9.
The proportion of consumers responding to the survey who described current business conditions as “good” fell a point to 7.5 percent. The share of those who called conditions “bad” dropped nearly two points to 41.2 percent.
Meanwhile, the proportion of consumers who called jobs “plentiful” fell four-tenths to 3.9 percent, while the share of those who said jobs are “hard to get” rose a half point to 46.8 percent.
Looking ahead, the proportion of consumer who expect business conditions to improve edged up two-tenths to 16.6 percent, while the share of those who expect conditions to worsen dipped three-tenths to 12.1 percent.
The proportion of those who expect more jobs to become available fell nearly a point to 14.3 percent, while the share of those who anticipate fewer job openings rose four-tenths to 19.5 percent.
The proportion of consumers who anticipate higher incomes fell more than a point to 9.9 percent.