A monthly measure of consumer confidence has surged to its highest level in more than seven years on more upbeat assessments of business and labor conditions in the United States.
The Conference Board reported that its Consumer Confidence Index jumped nearly 10 points to 102.9 in January. The latest reading is the highest since the index stood at 105.6 in August 2007.
“A more positive assessment of current business and labor market conditions contributed to the improvement in consumers’ views of the present situation. Consumers also expressed a considerably higher degree of optimism regarding the short-term outlook for the economy and labor market as well as their earnings,” said Lynn Franco, director of economic indicators at the Conference Board.
The Conference Board, a business research and membership association, bases the index on the results of monthly surveys of U.S. households. Economists closely monitor the index because consumer spending accounts for more than two-thirds of economic activity in the country.
More upbeat assessments of current business and labor conditions pushed the present situation component of the index up nearly 13 points to 112.6.
The proportion of consumers responding to the survey upon which the January index was based who characterized business conditions as “good” rose 3.4 points to 28.1 percent. The share of those who called conditions “bad” fell more than two points to 16.8 percent.
While 20.5 percent of consumers called jobs “plentiful,” up more than three points, 25.7 percent said jobs are “hard to get,” down nearly two points.
Consumers also were more optimistic in their short-term outlook, pushing up the expectations component of the index nearly eight points to 96.4.
The proportion of consumers who expect business conditions to improve over the next six months edged up six-tenths of a point to 18.4 percent. The share of those who anticipate worsening conditions fell more than two points to 7.7 percent.
The proportion of consumers who believe more jobs will become available in coming months increased more than two points to 16.7 percent. The share of those who expect fewer jobs declined 1.5 points to 15 percent.
While 20 percent of consumers expect their incomes to increase, up almost four points, 11.3 percent anticipate a decrease, up about a point.