Wednesday, February 01, 2006

Consumers Like the Economy!

The Conference Board Consumer Confidence Index had also increased in December. The Index now stands at 106.3, up from 103.8 in December. The Present Situation Index (PSI)rose 8 points. The Expectations Index, which considers opinions about the economy six months in the future, declined very slightly to 91.5 from 92.6 last month.

"Consumer confidence is now at its highest level in more than three years (June 2002, 106.3)," says Lynn Franco, director of The Conference Board Consumer Research Center. "This month's increase was driven solely by consumers' assessment of current economic conditions, especially their more positive view of the job market. But while consumers rate current conditions more favorably than they have in more than four years (Aug. 2001, 144.5), the improvement has not translated into greater optimism about the near-term future. In fact, the gap between consumers' assessment of current conditions and their expectations remains wide."

Overall, consumers' assessment of present-day conditions was more favorable in January than in December. Consumers claiming conditions are "good" increased to 25.8 percent from 24.4 percent. Those claiming conditions are "bad," however, also increased to 16.0 percent from 14.9 percent. Labor market conditions continued to perk up. Consumers saying jobs are "plentiful" rose to 26.9 percent from 23.3 percent, while those claiming jobs are "hard to get" decreased to 20.3 percent from 22.5 percent.

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