NEW YORK (1/29/14)--A measure of consumer confidence improved this month to its highest level since August, offering more evidence that the recovery has picked up steam after October's partial government shutdown.
The Conference Board's measure of consumer confidence was up 3.2 points to 80.7, according to a report published Tuesday by the research group. December's reading was revised down to 77.5 from 78.1.
The component gauging outlook on present conditions was up 3.8 points to 79.1--its highest level since April 2008--while the future expectations component was up 2.8 points to a four-month high of 81.8 (Economy.com Jan. 28).
The share of respondents who believe current business conditions are "good" rose 1.3 percentage points to 21.5%. The percentage of those who feel that the conditions are "bad" is the same, but the proportion dropped 0.7 percentage points.
Meanwhile, opinions of the labor market are slightly more rosy, according to the survey, with 12.7% of those polled saying they feel that jobs are "plentiful"--an increase of 0.8%. The percentage of those who feel that jobs are "hard to get" was down 0.3 points to 32.6%, and the proportion of those who feel jobs are "not so plentiful" fell 0.5 points to 54.7%.
Optimism about job growth, however, did not increase. The share of those expecting more and fewer jobs in six months were both down by 1.7 percentage points and 1.1 percentage points to 15.4% and 18.3% respectively, while 66.3% expect payrolls to stagnate--up 2.8 percentage points from December.
Consumers' predictions cast a pall over the otherwise mostly positive survey. The percentage of respondents who said they wanted a buy a home in the first six months of 2014 was down almost 2 points, to 5.5% from 7.4%. The share of those who reported plans to buy a major household appliance in the same time was also down to 44.9% from 49.3%, while 12.1% of respondents said they planned to buy an automobile--up slightly from 12% in December. Moody's said this aversion to purchasing big-ticket items could be an indication that rising interest rates are impacting consumers.
The ratings and research firm did say, however, that the survey bolsters predictions that January's jobs report will reveal improved growth--particularly due the narrowing gap between those who reported jobs are "plentiful" and those who say they're "hard to get." The firm's analysts did warn that three applicants are still fighting for every vacancy--below the post-recession peak of seven-to-one, but about equal to the ratio during the dot-com bust recession in the first few years of the millennium.
Moody's is still predicting that the economy will add slightly more than 200,000 jobs per month this year, and 250,000 per month in 2015.It also said that a relatively smooth raising of the debt ceiling should cause consumer confidence to grow.