The Associated Press reports that the U.S. Consumer Confidence Index (CCI) rose in January to the highest level experts have seen in the past eight months. The CCI climbed to 60.6 in January, up 53.3 from December, according to the global non-profit organization Conference Board. Shrinking unemployment and improving business conditions are believed to be key factors in the increased optimism U.S. consumers have shown in both their spending and saving habits.
Consumer Confidence Index better, but still not healthy
While economists are encouraged by the CCI’s rise to 60.6, that level is still far below the 90 that indicates at least semi-healthy consumer confidence in spending and use of short-term credit like payday loans. The Consumer Confidence Index measures how people feel about the state of the U.S. economy. The figure is based upon a survey of 5,000 households, according to the blog Banker Notes. The CCI hasn’t been above 90 since December 2007.
January’s 60.6 CCI is the highest since a 62.7 mark in May 2010, when it appeared that the U.S. economy was ready to take off again. Yet the summer was sluggish economically, and the CCI flagged. Unemployment surged to the highest levels seen in the U.S. since the 1930s, and unemployment levels still haven’t regained their footing since they hit bottom in June 2009.
Hope of job deliverance
The AP reports that a survey from the National Association for Business Economics shows that the number of companies optimistic about hiring is at a 12-year high. This coincides somewhat with the reaction consumers gave to a Conference Board survey regarding the state of the job market, as the percentage of respondents who feel jobs are too hard to come by is down to 43.4 percent. That’s about a 3 percent drop from December. The percentage of those polled by the Conference Board who expect to see more jobs available in six months was also on the rise, from 14.2 percent in December to 16 percent in January.
Consumer spending up, unemployment down
The 2010 holiday shopping season was a boon for consumer spending, as sales increased at the fastest rate in six years. The new Social Security tax cut is expected to contribute to further consumer spending. Meanwhile, unemployment was down 0.4 percent from November to December, yet U.S. job creation only produced 103,000 jobs.