Reflecting an increase in optimism about the short-term economic outlook, the Conference Board released a report on Tuesday unexpectedly showing an improvement in U.S. consumer confidence in the month of January.
The Conference Board said its consumer confidence index climbed to 89.3 in January from a downwardly revised 87.1 in December.
The increase surprised economists, who had expected the index to edge down to 88.5 from the 88.6 originally reported for the previous month.
The unexpected rebound by the headline index came as the expectations index jumped to 92.5 in January from 87.0 in December.
The percentage of consumers expecting business conditions to improve over the next six months increased to 33.7 percent from 29.5 percent, while those expecting business conditions to worsen fell to 18.1 percent from 22.0 percent.
The outlook for the job market also improved, with consumers expecting more jobs in the months ahead rising to 31.3 percent from 28.0 percent, while those anticipating fewer jobs dipped to 21.4 percent from 22.2 percent.
Meanwhile, the report said the present situation index slid to 84.4 in January from 87.2 in December, suggesting consumers’ appraisal of current conditions weakened further during the month.
The percentage of consumers claiming business conditions are “good” inched up to 15.8 percent from 15.4 percent, but those claiming business conditions are “bad” also rose to 42.8 percent from 39.7 percent.
Consumers’ assessment of the labor market was also less favorable, with the percentage of consumers saying jobs are “plentiful” edging down to 20.6 percent from 21.0 percent and those claiming jobs are “hard to get” rising to 23.8 percent from 22.9 percent.
“Consumers’ appraisal of present-day conditions weakened further in January, with COVID-19 still the major suppressor,” said Lynn Franco, Senior Director of Economic Indicators at the Conference Board.
She added, “Consumers’ expectations for the economy and jobs, however, advanced further, suggesting that consumers foresee conditions improving in the not-too-distant future.”
On Friday, the University of Michigan is scheduled to release its revised reading on consumer sentiment in the month of January.
Economists expect the consumer sentiment index for January to be unrevised from the preliminary reading of 79.2, which was down from 80.7 in December.
The material has been provided by InstaForex Company – www.instaforex.com