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Economy in Brief

U.S. Consumer Confidence Reaches High Since April
by Carol Stone December 28, 2011

The Conference Board's Index of Consumer Confidence gained again for December, adding 9.3 points to 64.5 (seasonally adjusted, 1985=100) and suggesting that November's 14.3-point surge was not a fluke. Consensus estimates had looked for 59.0. The December figure is the highest since April's 66.0 and the gains in November and December are the first back-to-back increases since February.

The present conditions components rose 8.4 points for December, and with November's 11.2-point increase, they reached 46.7, their highest since September 2008! Both sub-items, business conditions and job availability, contributed, with "good" readings rising modestly and "bad" readings retreating a bit. In particular, "jobs hard to get" decreased from a cycle high of 49.4 just in September to 41.8 this month; while hardly a low number from a longer historical perspective, the December value is still the lowest since January 2009.

Similarly, consumer expectations continued a rebound, reversing a good portion of their mid-year sinking spell. The December figure, 76.4, remains substandard by historical comparison, but at least the index returned to the range that had prevailed from late 2009 through early 2011. Expectations for employment, as with the present conditions items, showed a modest increase in the positive responses and a modest decrease in weaker responses. The number of people increases who expect their incomes to grow, and there was a tiny rise in the number expecting their incomes to go down; however the latter item had retreated markedly in November, so the two months are noticeably lower than the previous several months.

Expectations for inflation in the next twelve months edged down to 5.4% from 5.6% in November. Note that people still believe that inflation exceeds a 5% pace. The number of people looking for stock prices to rise increased to 26.5% this month, the most optimistic since July, while the number who are bearish fell in December to 39.8%, the least negative since July.

Headline figures on consumer confidence are carried in Haver's USECON database. The Conference Board's detailed data are found in Haver's CBDB database, and the consensus expectation figure is from Actions Economics, as tabulated in the AS1REPNA database.

Conference Board (SA, 1985=100) Dec Nov Oct Sep Y/Y % 2011 2010 2009
Consumer Confidence Index 64.5 55.2 40.9 46.4 -3.1 58.1 54.5 45.2
Present Situation 46.7 38.3 27.1 33.3 55.1 36.2 25.7 24.0
Expectations 76.4 66.4 50.0 55.1 -15.1 72.7 73.7 59.3
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