NEW YORK: Consumer confidence rose for the second straight month, up 2% from November, but overall it remains at historic lows, according to the monthly survey by The Conference Board Consumer Research Center.
The survey showed the overall Consumer Confidence Index at 52.9%, compared to 50.6% in November. The Expectations Index, measuring how consumers view the near-future, rose as well, moving up 5% to 75.6% from last month, the highest jump in that category in two years.
“We're seeing improvement in business and employment expectation, which can lead to an improved outlook for consumers,” said Lynn Franco, director of the Conference Board Consumer Research Center. “Generally, there's a pattern where as the economy begins to reach a bottom and recover, consumers begin to regain sentiment for companies and brands they may have previously lost confidence in.”
Yet consumers had a less positive view of the present. The report's "Present Situation Index," which measures how confident consumers feel about their current situation, decreased to 18.8% from 21.2%, the lowest score since February 1983's measurement of 17.5%.
Franco said the number is in line with expectations due to the economy's slow progression, noting a consumer pattern during times of recovery to predict good things for the future while remaining dissatisfied with the present. Franco said she expects present-day outlook to improve during the first months of the new year.
“The key figure is employment. Whatever way employment goes, so goes the outlook,” she said. “As we see the unemployment rate go down a few points, we're going to continue to see improved consumer confidence. And we expect that trend to continue into 2010.”
Franco said she also noticed a trend concerning pollsters' responses pertaining to how and where they spend their money.
“Consumers still connect their outlook on the economy with their spending,” she said. “They're currently more interested in spending their discretionary income on more affordable items, than on the higher ticket items. It's something big companies can consider when developing a strategic plan.”
The monthly Consumer Confidence Index queries 5,000 individuals on business, employment, company, and brand sentiment, and was conducted from December 1, to December 21.
Carol Courter, manager of public and media relations at The Conference Board, noted that the survey information, released the last Tuesday of every month, is published on the board's Web site and disseminated to the media through PR Newswire.