The Conference Board announced Tuesday its Consumer Confidence Index rose again in December as recent gains in home sales and prices, coupled with an improved outlook over labor markets, pushed sentiment higher.
The agency’s confidence index hit 52.9 for the month, after rising to 50.06 in November. The rise was mainly attributed to a strong increase in the expectations index, which hit 75.6.
“Consumer Confidence posted yet another moderate gain in December as expectations for the short-term future increased to the highest level in two years,” said Lynn Franco, Director of The Conference Board Consumer Research Center. The expectations index was last higher in December 2007, hitting 75.8.
Expectations for business conditions improved as 21.3 percent of consumers believe better times lie ahead, up from 19.7 percent in November. Those expecting conditions to deteriorate fell to 11.9 percent from 14.6 percent.
The employment outlook improved as well, with 16.2 percent of consumers expecting more jobs to become available over the next six months. That’s an increase from 15.8 percent in November.
However, consumers did not feel an improving employment picture would mean a growing pocketbook as only 10.3 percent of participants felt incomes would rise in coming months, down from 10.9 percent in November.
The present situation index was also a weak spot, falling to 18.8 in December and now sitting near a 26 year low of 17.5. The index is down from 21.2 in November.
The overall rise in consumer confidence the past two months has corresponded with continued increases in home prices as the market firms up. The Standard & Poor’s/Case-Shiller home price index edged up 0.4 percent in October to 145.36, which puts the index 7.3 percent higher than the low set back in March.
Sentiment has also been helped by a strong rise in existing home sales in recent months. Last week the National Association of Realtors (NAR) said sales in November rose 7.4 percent to an annual pace of 6.54 million units, which is a whopping 44 percent higher than the same period in 2008.
Sales are at their highest level since the annual pace of 6.55 million set in February 2007, according to the NAR.
