Consumer confidence improved faster in January than economists estimated, rising to an eight-month high of 60.6, the Conference Board reported Tuesday.
Economists forecast an increase to 54.3 from a December level of 53.3. Consumer confidence has averaged 84.31 the past 10 years in the index, which has a base reading of 100 that reflects survey responses in 1985.
“The level of confidence remains relatively subdued,” Steven Wood, chief economist at Insight Economics, said of the January data. “Much of the weakness is due to high unemployment, soft housing prices, lofty foreclosures, and tight credit standards. Although the economy is growing again, and hiring has picked up, consumer attitudes are lagging behind these broader economic developments.”
The December reading was revised upward to 53.3 from an original 52.5.
Consumer sentiment is now near levels not seen since last spring, according to Lynn Franco, director of the board’s Consumer Research Center.
Consumer perceptions of the present situation rose to 31 in January from 24.9. Their expectations surged to an eight-month high of 80.3 from 72.3 in December.
Business conditions were described as “good” by 9.8% of respondents in January, compared with 7.7% in December. The ratio describing conditions as “bad” edged down to 40.4% from 40.5%.
Labor perceptions also improved, with 5.2% of respondents describing jobs as “plentiful,” up from 4.2%. The number who said jobs were “hard to get” fell to 43.4% in January from 46%.