The post-election surge in optimism over the economy spilled into December, sending The Conference Board’s consumer confidence index to a post-recession high.
The index rose to 113.7 in December from an upwardly revised 109.4 in November, topping the July 2007 high of 111.9.
According to Lynn Franco, director of economic indicators at The Conference Board, the increase reflected heightened expectations that short-term economic conditions will improve. The board’s Expectations Index, which measures consumers’ outlook for the next six months, rose sharply from 94.4 in November to 105.5, a 13-year high.
“The post-election surge in optimism for the economy, jobs and income prospects, as well as for stock prices … was most pronounced among older consumers,” Franco said in a news release.
Consumers’ assessment of current conditions declined in December. Those saying business conditions are “good” decreased slightly from 29.7% to 29.2%, while those saying business conditions are “bad” increased from 15.2% to 17.3%.
Sentiment about the labor market was also less positive than last month. Those stating jobs are “plentiful” declined from 27.8% to 26.9%, while those claiming jobs are “hard to get” increased from 21.2% to 22.5%.
Franco said the assessment of current conditions still suggests that economic growth continued through the final months of 2016. “Looking ahead to 2017, consumers’ continued optimism will depend on whether or not their expectations are realized,” she added.
The Conference Board also found that those expecting business conditions to improve over the next six months increased from 16.4% to 23.6%, while those expecting business conditions to worsen declined from 9.9% to 8.7%.
The proportion expecting more jobs in the months ahead increased from 16.1% to 21.0%, but those anticipating fewer jobs also increased, from 13.5% to 14.0%.
Those expecting their incomes to increase rose from 17.4% percent to 21.0%, while the proportion expecting a decrease fell moderately, from 9.2% to 8.6%.