- Optimism about current state of the economy improves
- Share saying jobs plentiful is second-highest in eight years
Consumer confidence rebounded more than forecast in December as Americans grew more optimistic about the current state of the economy and job market.
The Conference Board’s sentiment index climbed to 96.5 from a revised November reading of 92.6 that was higher than previously estimated, the New York-based private research group said Tuesday. The median forecast in a Bloomberg survey of economists called for 93.5.
The combination of a strong labor market and cheap fuel costs have buoyed households’ finances, giving them the wherewithal to purchase everything from cars to clothing and holiday gifts. Faster growth in wages would usher in bigger gains in confidence and probably provide another boost to consumer spending, the biggest part of the economy.
“Some of the primary things boosting confidence are strong labor market conditions and perhaps more importantly, low gasoline prices,” said Thomas Simons, a money-market economist at Jefferies Group LLC in New York. “On the margin, it should increase consumers’ propensity to spend.”
The share of Americans who see greater job availability in the next six months increased, and fewer expected their incomes to decline, the report showed.
Estimates in the Bloomberg survey of 57 economists ranged from 88.5 to 97.3.
The group’s report is in sync with the University of Michigan’s final reading for December. That gauge climbed to 92.6, the highest since July.
The Conference Board report showed confidence jumped most for those who are younger than 35 years old, where optimism reached the highest level since January. It was little changed for those from 35 to 54 years old and declined for those 55 and older.
The Conference Board’s measure of consumer expectations for the next six months rose to 83.9 from 80.4 in November. Some 12.9 percent anticipated more jobs will be available, up from 12 percent a month earlier.
About 9.7 percent of respondents projected their incomes would decrease in the next six months, down from 11.8 percent and the fewest since March.
The Conference Board’s index of present conditions jumped to 115.3 this month from 110.9 last month. The share of Americans who said jobs were hard to find fell to 24.7 percent from 25.8 percent. The share of those saying jobs were plentiful, at 24.1 percent, was the second-highest in eight years.
“As 2015 draws to a close, consumers’ assessment of the current state of the economy remains positive, particularly their assessment of the job market ,” Lynn Franco, director of economic indicators at the Conference Board, said in a statement.
Buying plans were mixed, with fewer saying they expected to purchase automobiles and houses, and more saying they will purchase a major appliance or take a vacation, the Conference Board’s data showed.