Consumers are feeling better about things. Consumer confidence, as measured by the Conference Board, improved to an index reading of 80.7 this month from December's 78.5, revised from 78.1. The latest gain outpaced the Action Economics Consensus Forecast reading of 78.8. During the last ten years there has been a 45% correlation between the level of confidence and the three-month change in real personal consumption expenditures.

The present situations reading gained to 79.1 from 75.3 (40.7% y/y) and the expectations indicator rose to 81.8 (36.6% y/y) from 79.9. Business conditions were rated as good by 21.5% of respondents, an expansion high, but only 17.4% thought they would be better in six months, down from 21.4% who thought so in June. Jobs were viewed as hard to get by 32.6% of respondents, an expansion low. Just 15.4% thought that there would be more jobs in six months. A sharply reduced 0.6% of respondents expected to buy a new home in six months. Just 44.9% were going to buy a major appliance. Expectations for the inflation rate fell to 5.1%, the lowest reading since October 2010.

By age group, confidence improved the most in the youngest age group to a reading of 100.9, a four month high. Confidence in the eldest age group also gained to 71.1, an expansion high, but confidence amongst middle-agers backpedaled to 82.8, down from 90.0 in August.

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