US' consumer confidence rises in December 2023

The country also saw an improvement in the present situation index, which is based on consumers' evaluation of current business and labour market conditions. This index rose to 148.5 from 136.5 in the previous month. In terms of current business conditions, more consumers viewed them positively in December. Specifically, 21.7 per cent of consumers stated that business conditions were ‘good,’ an increase from 18.6 per cent in November. Conversely, those who believed business conditions were ‘bad’ decreased to 16.5 per cent, down from 18.9 per cent, as per The Conference Board.

In addition, the labour market assessment was also more favourable. A higher percentage of consumers, 40.7 per cent, said that jobs were ‘plentiful,’ an increase from 38.6 per cent in November. Those who felt jobs were ‘hard to get’ dropped to 13.2 per cent, down from 15.6 per cent.

The expectations Index, which is based on the short-term outlook for income, business, and labour market conditions, also showed a significant jump. It leapt to 85.6 in December from a downwardly revised 77.4 in November. This sharp increase has brought the expectations back to the levels of optimism last seen in July of the same year.

Looking at the short-term outlook, consumers were less pessimistic about business conditions. There was an increase in the percentage of consumers expecting business conditions to improve, moving up to 18.7 per cent from 17.2 per cent in November. Similarly, those expecting business conditions to worsen decreased to 16 per cent, down from 20.1 per cent.

The short-term labour market outlook also improved. More consumers, 17.8 per cent, expect more jobs to be available, up from 16.7 per cent in November. Those anticipating fewer jobs declined to 17.2 per cent, down from 20.1 per cent.

Furthermore, consumers' assessment of their short-term income prospects saw an improvement. A higher percentage, 18.7 per cent, expect their incomes to increase, a rise from 17.7 per cent in November. The percentage expecting a decrease in income remained virtually unchanged at 12.6 per cent, compared to 12.7 per cent.

Finally, the perceived likelihood of a US recession over the next 12 months abated in December to the lowest levels seen this year. However, it's noteworthy that two-thirds of the consumers still perceive a downturn as possible, reflecting a cautious optimism amidst economic uncertainties.

ALCHEMPro News Desk (DP)