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First Cut: December Consumer Confidence Index on trend with past four months of moderate readings

The Conference Board’s Consumer Confidence Index for December was 126.5, little changed from the readings of the prior four months as consumers’ optimism about conditions new and in the near future remains solid. There is some month-to-month variation, but the underlying trend remains one of near historic highs for present conditions and good — if sensitive — expectations for six months from now.

Steady confidence suggests that consumer spending — which carried GDP growth in the second and third quarters — is probably on a similar track for the fourth quarter. There’s no reason to look for change in momentum in the composition of confidence.

The index for present conditions rose to 170.0 in December after a dip to 166.6 in November. The strength in the labor market and continued vigorous business conditions are keeping the index at sustained highs.

The index for six months from now was down a bit at 97.4 in December after 100.3 in November. This component can be noisy depending on the news cycle which was quite negative on balance for December. However, the level of the index does not suggest any significant deterioration in the outlook. Expected business conditions were improved in December even as expectations for employment and income were down.

 

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