Consumer Confidence Also Improved In December

The better-than-expected jobs report for December is likely to continue a trend of improving consumer confidence. Both Thomson Reuters/University of Michigan Surveys of Consumers and The Conference Board reported upticks in their confidence indices in December. The UM Consumer Sentiment Index rose to 69.1 from 64.1 in November, while The Conference Board Consumer Confidence Index jumped to 64.5 from 55.2 the previous month. Both groups’ Consumer Expectations indexes also rose sharply.

The release accompanying the UM report specifically noted that “Importantly, consumers more frequently reported hearing news about employment gains in the December survey.” The new jobs report is likely to increase consumers’ sense that the employment picture is improving.

Both indexes have recovered the losses they suffered in the late spring 2011, as gasoline and food prices increased, and over the summer, as the federal debt-ceiling debacle further discouraged many consumers. Lynn Franco, director of the Conference Board Research Center, said “After two months of considerable gains, the Consumer Confidence Index is now back to levels seen last spring. Consumers’ assessment of current business and labor market conditions improved again. Looking ahead, consumers are more optimistic that…their financial situations will continue to get better.”