December 29, 2009 in Business

Consumer confidence extends rise in December

Associated Press
 

NEW YORK — A more upbeat outlook on jobs pushed Americans’ confidence in the economy higher in December for the second month in a row, a survey released today said.

Consumers’ outlook on the job market over the next six months reached its highest level in two years, but they remain gloomy about their current prospects.

The New York-based The Conference Board said Tuesday that its Consumer Confidence Index rose to 52.9, up from a revised 50.6 in November, but the reading is still far short of the 90 that would signify a solid economy. In October, consumer confidence had reached 48.7.

Economists surveyed by Thomson Reuters predicted a reading of 52 for December.

The index, which hit a historic low of 25.3 in February, had enjoyed a three-month climb from March through May, fueled by signs that the economy might be stabilizing. The road has been bumpier since June as rising unemployment has taken a toll on consumers.

Economists watch consumer sentiment because spending on goods and services for consumers accounts for about 70 percent of U.S. economic activity by federal measures.

One key component of the index that measures shoppers’ outlook over the next six months rose to 75.6 from 70.3 last month, the highest level since December 2007, when the index was 75.8. But the survey’s other main component, which measures shoppers’ current assessment, actually fell to 18.8 from 21.2.

The survey of 5,000 households ran Dec. 1 through 21.

“Regarding income, however, consumers remain rather pessimistic about their short-term prospects and this will likely continue to play a key role in spending decisions in early 2010,” Lynn Franco, director of The Conference Board Consumer Research Center said in a statement.

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