Tis the season to be jolly.
U.S. consumer confidence jumped in December. The Conference Board said its measure of consumer confidence rose to 110.7 from a downwardly revised 101.0 in November.
This was much better than economists expected. The consensus forecast had consumers unwrapping just 103.4, a small uptick from the prior estimate of 102.0 for November.
The rise in consumer confidence comes amid economic data showing that the U.S. economy likely picked up steam at the tail-end of 2023. The Atlanta Fed’s GDPNow measure shows the economy growing at a 2.7 percent pace in the fourth quarter, significantly above the Wall Street expectations for around one percent growth.
“December’s increase in consumer confidence reflected more positive ratings of current business conditions and job availability, as well as less pessimistic views of business, labor market, and personal income prospects over the next six months,” said Dana Peterson, Chief Economist at The Conference Board. “While December’s renewed optimism was seen across all ages and household income levels, the gains were largest among householders aged 35-54 and households with income levels of $125,000 and above.”
The likelihood of a recession over the next year also declined, although consume3rs are still worried about global conflict, interest rates, and politics.
“December’s write-in responses revealed the top issue affecting consumers remains rising prices in general, while politics, interest rates, and global conflicts all saw downticks as top concerns. Consumers’ Perceived Likelihood of a US Recession over the Next 12 Months abated in December to the lowest level seen this year—though two-thirds still perceive a downturn is possible in 2024,” Peterson said.
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