WASHINGTON – U.S. consumers welcomed the new year with a surge in confidence.
The Conference Board reported Tuesday that its consumer confidence index climbed this month to 102.9, highest level since August 2007 — four months before the start of the Great Recession. January’s figure was up from a revised 93.1 in December.
“Consumers started the year in a buoyant mood,” Andrew Hunter, an analyst at Capital Economics, wrote in a research note.
Americans haven’t felt this good about current economic conditions since January 2008. And they are the most optimistic they’ve been since February 2011 about business conditions over the next six months.
The Conference Board also found that 20.5 per cent of consumers surveyed described jobs as “plentiful” — the biggest share in nearly seven years. The figure had dropped as low as 3.1 per cent in November and December 2009.
Consumer confidence has been rising as the economy improves. Employers added nearly 3 million jobs last year, most since 1999. The unemployment rate last month tumbled to a 6-year low of 5.6 per cent.
The economy grew from July through September at a 5 per cent annual rate, fastest in 11 years.
Adding to improving spirits: Gas prices have plunged to $2.04 a gallon Tuesday from $2.32 a gallon a month ago, according to AAA. Lower gasoline prices leave more money in consumers’ wallets to spend on other things.
Bricklin Dwyer, an economist at BNP Paribas, wrote in a research note that the stronger consumer confidence numbers “support our forecast for continued strength in consumer spending.”
Absent from the economic success story so far are significant wage gains: Adjusted for inflation, hourly earnings for private-sector employees were the same last month as they’d been in December 2008.