·
Consumer confidence rose in December, according to the
Conference Board's monthly survey. It went up 3.7 points to 109.0
(1985=100), the highest reading since April. November's figure was revised
upward by 2.3% from 102.9 reported a month ago. Both major components,
assessments of present conditions and expectations for the coming six months,
contributed to December's rise, adding 4.5 points and 3.2 points,
respectively. This outcome differs from the University of Michigan survey,
which eroded a bit on diminished expectations. It also differs from
consensus forecasts, which had looked for a decrease from the original 102.9 to
102.1.
· "Present conditions" are measured by responses about
general business conditions and the status of labor markets. This month,
ironically, fewer consumers said they see business conditions as
"good", but the number saying they are "bad" decreased
more. There appears to be some improvement in the availability of jobs, as
the number seeing jobs as "plentiful" increased 1.2 points, although
at 26.9%, that remains below the first seven months of 2006. The
proportion of consumers believing jobs are "hard to get" also rose a
bit, but just 0.9 point; this too has a less favorable reading than what
prevailed in the first half of 2006.
· Expectations are mixed. The share of consumers looking
for "more jobs" increased 0.7 point to 14.0%, but paradoxically the
share expecting their income to go up decreased by 2.4 points. Sources of
the rise in expectations are actually more "back-handed": fewer
people expect business and employment conditions to worsen.
· So, despite the favorable appearance of the overall consumer
confidence indexes, the details suggest that people remain skittish.
Results concerning interest rates and the stock market also indicate this
ambivalence: while many fewer people are looking for higher interest rates, the
number of people looking for higher stock prices is down and the number looking
for lower stock prices is up. Stay tuned!