By Ruth Mantell
RISMEDIA, December 30, 2010—(MCT)—An index of U.S. consumer confidence declined in December 2010 on concerns about jobs in the present and future, the Conference Board reported.
Confidence fell to a reading of 52.5 in December from an upwardly revised 54.3 in November. A prior estimate for November saw confidence reaching 54.1. “Consumers’ assessment of the current state of the economy and labor market remains tepid, and their outlook remains cautious,” said Lynn Franco, director of Conference Board’s consumer research center, in a statement.
She added that signs suggest a continuation next year of the economy’s expansion but that “the pace of growth will remain moderate.”
Analysts polled by MarketWatch had expected confidence to rise to 56.9, with consumers cheered by lower initial claims for unemployment-insurance benefits seen recently as well as enactment of a far-reaching tax bill.
“This was a weak report, and if its assessment of consumer confidence is correct, it could be pointing to a sour tone for personal spending going forward,” wrote Millan Mulraine, economics strategist with TD Securities, in a research note.
A separate report tracking how consumers feel had estimated that their sentiment rose in December, reaching the highest level in six months, but remained relatively low on concerns about stagnant incomes.
A barometer of consumers’ expectations fell to 71.9 in December from 73.6 in November, according to the Conference Board.
The proportion of respondents expecting there to be fewer jobs in six months rose to 19.5% in December from 19.1% in November, while those expecting more jobs to be available fell to 14.3% from 15.1%. Most consumers expect the same number of jobs.
A gauge of consumers’ assessment of the present situation decreased to 23.5 in December from 25.4 in November. Those saying that jobs are “plentiful” fell to 3.9% in December from 4.3% in November, with most respondents still saying that jobs are “not so plentiful” or “hard to get.”
Against this backdrop, consumers have been reassessing their spending plans. Those with plans to buy an automobile within six months fell to 4.5% in December from 5.6% in November, while those with plans to buy major appliances eased to 25% from 25.2%. Those with plans to buy a home rose, reaching 1.8% from 1.7%.
The Conference Board’s index helps analysts compare fluctuations in confidence, with a reading of 100 for the base year of 1985. Generally, when the economy is growing at a good clip, confidence readings are at 90 and above.
(c) 2010, MarketWatch.com Inc.
Distributed by McClatchy-Tribune Information Services.
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