US consumers started 2019 feeling more confident, even better than expected, according to a private survey released Tuesday that also showed confidence climbed in December.
Analysts hailed the stronger than expected results showing Americans are more upbeat about their job prospects, and willing to spend more cash, which will shore up the US economy.
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And the updated December data turned what was initially reported as a slight dip in confidence into a solid increase last month, according to the Conference Board’s monthly report.
The Consumer Confidence Index beat analysts’ expectations, rising to 131.6 in January from 128.2 in December, an upward revision from the initial estimate of 126.5.
Consumer spending is a mainstay of the world’s largest economy and survey respondents saw their prospects improving in January.
“Optimism about the labor market should continue to support confidence in the short-term and, as a result, consumers will continue driving growth and prevent the economy from slowing in early 2020,” said Lynn Franco, head of economic indicators at the Conference Board.
Respondents saying business conditions were “good” climbed to 40.8 percent from 39 percent, while the number of people saying business was “bad” fell sixth tenths to 10.4 percent.
Similarly positive views were reported for the job market, with those saying jobs were “plentiful” climbing to 49 percent from 46.5 percent. Those who said jobs were “hard to get” fell to 11.6 percent from 13 percent the month prior.
Rubeela Farooqi of High Frequency Economics said the report shows “solid gains in confidence, with both the current conditions and expectations index moving higher.”
The outlook for business conditions and income in the next sixth months were about flat compared to December, with more than two-thirds of respondents expecting their paychecks to remain the same.
But a greater share said they were planning to buy a new home and major appliances.
But Ian Shepherdson, chief economist at Pantheon Macroeconomics, said in an analysis one of the survey’s few areas of concern was a decline in auto buying plans to 11.5 percent, a three-month low.
The drop, he said, was “perhaps reflecting tighter credit conditions as auto loan delinquency rates rise.”