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Economy in Brief

U.S. Consumer Confidence Rebounds in December
by Carol Stone  December 31, 2013

After falling in October and November, consumer confidence recovered in December, picking up to 78.1 (SA, 1985=100) from November's 72.0, which is modestly revised from 70.4 reported initially. The Action Economics consensus expected a comeback to 76.0 in December. Readings improved on both the present situation and expectations, the former up to 76.2 from November's 73.5 with more in expectations, to 79.4 from 71.1 the prior month.

Historically, changes in consumer confidence have been linked to changes in personal consumption. Sure enough, the strengthening in confidence was reflected in more consumers who told the Conference Board they intend to buy homes and appliances in the next six months, a reversal of the drops in those items in November. Plans to buy cars actually edged marginally lower in December, but they had basically held steady in November, so there was no visible whipsaw in that market.

By age group, confidence improved in all three ranges, under 35, 35 to 54 and over 55. The year-on-year comparisons continue to show weakness in the youngest group, still down from December 2012, while the two older age-spans show considerably more optimism than a year ago.

The labor market differential (the difference between respondents' appraisals of jobs plentiful and jobs hard to get) continued to edge up, as fewer people see that jobs are hard to get. Historically, the differential has had a close relationship with the unemployment rate. So, while still well down in negative territory, its continued improvement suggests further improvement in the unemployment rate.

The Consumer Confidence data is available in Haver's CBDB database. The total indexes appear in USECON and the market expectations are in AS1REPNA.

Conference Board (SA, 1985=100) Dec Nov Oct Y/Y % 2012 2011 2010
Consumer Confidence Index 78.1 72.0 72.4 17.1 67.1 58.1 54.5
  Present Situation 76.2 73.5 72.6 18.0 49.8 36.1 25.7
  Expectations 79.4 71.1 72.2 16.6 78.6 72.8 73.7
Consumer Confidence By Age Group
  Under 35 Years 89.2 84.2 83.7 -5.9 86.5 77.3 70.4
  Aged 35-54 Years 84.8 79.4 82.0 28.7 68.5 59.8 55.1
  Over 55 Years 67.3 61.0 57.9 25.6 56.7 47.3 47.4
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