New
York, NY, Dec. 28—Consumer confidence rose sharply in December following a
three month decline, as the erosion of the economy and the job market appeared
to begin leveling off. The New York based Conference Board’s Consumer
Confidence Index rose to 93.7 this month from a revised 84.9 in November.
Analysts were expecting a reading of only 83. The industry group's index, based
on a monthly survey of some 5,000 U.S. households, is closely watched because
consumer confidence drives consumer spending, which accounts for about two
thirds of the nation's economic activity.
“The deterioration in current economic conditions appears to be reaching a
plateau, led by a stabilizing employment scenario,” said Lynn Franco, director
of the Conference Board's research center. The increase, she said, suggests that
an economic recovery is possible by the middle of next year and that the worst
of the downturn may be over.
The index compares results to its base year, 1985, when it stood at 100. The
November figure was the lowest since February 1994, when it reached 79.9.
The Labor Department reported that new claims for unemployment insurance rose
last week by a seasonally adjusted 7,000 to 392,000. The report offered hope
that better days may be ahead for the economy, which slipped into recession in
March.
According to the Conference Board, consumers' assessment of the current economic
climate was slightly more positive in December than in November. Consumers
rating current business conditions as good increased to 17% from 16.8%. However,
consumers who felt business conditions were bad rose to 21.7% from 20.7% last
month. Nontheless, Americans are still feeling more optimistic about the near
future. The percentage of consumers who expect business conditions to improve
rose to 22.2% from 17.7% in November. Those expecting conditions to sour
declined to 11.6% from 16.9%.
Consumers' outlook about jobs also improved. In December, 16.1% said they expect
more jobs to become available in the next six months, up from 14.4% in November.
Those expecting fewer jobs to open up decreased from 26.3% to 19.3%.
Copyright
2001 Floor Focus Inc
