Americans haven’t felt this good about their financial well-being since 1969.
Consumer confidence surged to a 28-year high in December, the latest milestone for an economy soon to begin its eighth year of expansion.
“Growth is up. People are employed. We are competitive with the rest of the world. What’s not to be confident about?” said Steve Hoey of Huntington, N.Y., who strolled with his two children in Rockefeller Center.
The Conference Board, a private research group, reported Tuesday that its index of consumer confidence - which tracks sentiment on everything from the job market to home-buying plans - rose to 134.5 this month from 128.1 in November. The figure was well above Wall Street’s expectations.
The index is important because consumer spending accounts for two-thirds of the nation’s overall economic activity.
Consumer confidence hasn’t been this high since June 1969, when it hit 137.9. Richard Nixon was president, the Vietnam War was raging and the United States was undergoing nearly nine years of uninterrupted growth, the longest expansion in U.S. history.
Now, “consumers see favorable employment conditions and they are making more money,” said Dan Seto, an economist at Nikko Securities International Co. “That’s providing some good momentum going into 1998.”
Still, economists and investors worry that continued robust growth may spur inflation.
The consumer confidence index, calculated from a 1985 base of 100, is derived from responses to questions sent to 5,000 households nationwide.
The board’s current situation index, designed to measure consumers’ current assessment of the economy, surged from 156.8 to 161.7, its highest level since 1969. The expectations index, which attempts to measure consumers’ level of confidence in the future, rose to 116.4 from 108.9.