U.S. Consumer Confidence Improves To Seven-Year High In January

(RTTNews) - Consumer confidence in the U.S. has seen a substantial improvement in the month of January, according to a report released by the Conference Board on Tuesday, with the consumer confidence index jumping to its highest level in over seven years.

The Conference Board said its consumer confidence index surged up to 102.9 in January from an upwardly revised 93.1 in December. Economists had expected the index to climb to 96.0 from the 92.6 originally reported for the previous month.

The much bigger than expected increase lifted the index to its highest level since reaching 105.6 in August of 2007.

Andrew Hunter, an assistant economist at Capital Economics, said the jump by the index reflects the significant boost to real incomes from continued strong job growth and the plunge in gasoline prices.

"What's more, this is no outlier, with all of the other main measures of confidence having also reached multi-year highs," Hunter said. He added, "In all, after the weak durable goods orders data released earlier today implied that business investment is struggling, this surge in confidence suggests that consumption is having no such problems."

The Conference Board noted that the present situation index surged up to 112.6 in January from 99.9 in December, as consumers' assessment of present-day conditions was considerably more favorable.

Consumer saying business conditions are "good" increased to 28.1 percent from 24.7 percent, while those claiming business conditions are "bad" fell to 16.8 percent from 18.9 percent.

The report also said consumers saying jobs are "plentiful" rose to 20.5 percent from 17.2 percent, while those claiming jobs are "hard to get" decreased to 25.7 percent from 27.3 percent.

Additionally, the Conference Board said the expectations index climbed to 96.4 in January from 88.5 in December, reflecting an improvement in consumers' optimism about the short-term outlook.

The percentage of consumers expecting business conditions to improve over the next six months edged up to 18.4 percent from 17.8 percent, while those expecting business conditions to worsen declined to 7.7 percent from 9.9 percent.

Consumers' outlook for the labor market was also more optimistic, as those anticipating more jobs in the months ahead increased to 16.7 percent from 14.6 percent, while those anticipating fewer jobs slipped to 15.0 percent from 16.5 percent.