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Consumer confidence rises sharply in January

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Consumer confidence rises sharply in January

Improved economic conditions and labor market resulting in greater optimism.

According to the latest survey from advisory group The Conference Board, consumer confidence spiked in January, continuing a string of good economic news.

The Conference Board’s Consumer Confidence Index, which had increased in December, rose sharply in January. The Index now stands at 102.9, up from 93.1 in December. The Present Situation Index rose to 112.6 from 99.9, while the Expectations Index increased to 96.4 from 88.5 in December.

"A more positive assessment of current business and labor market conditions contributed to the improvement in consumers' view of the present situation."

Lynn Franco, Director of Economic Indicators at The Conference Board, said "Consumer confidence rose sharply in January, and is now at its highest level since August 2007. A more positive assessment of current business and labor market conditions contributed to the improvement in consumers' view of the present situation. Consumers also expressed a considerably higher degree of optimism regarding the short-term outlook for the economy and labor market, as well as their earnings."

Consumers' assessment of present-day conditions was considerably more favorable in January than in December. Those saying business conditions are "good" increased from 24.7% to 28.1%, while those claiming business conditions are "bad" decreased from 18.9% to 16.8%. Consumers were also much more positive in their assessment of the job market. Those stating jobs are "plentiful" increased from 17.2% to 20.5%. Those claiming jobs are "hard to get" decreased from 27.3% to 25.7%..

Consumers' optimism about the short-term outlook improved in January. The percentage of consumers expecting business conditions to improve over the next six months rose from 17.8% to 18.4%, while those expecting business conditions to worsen declined from 9.9% to 7.7%.

Consumers' outlook for the labor market was also more optimistic. Those anticipating more jobs in the months ahead increased from 14.6% to 16.7%, while those anticipating fewer jobs declined from 16.5% to 15.0%. The proportion of consumers expecting growth in their incomes improved from 16.2% to 20.0%. However, the proportion expecting a decrease increased marginally, from 10.2% to 11.3%.

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