Consumers more confident in January

Consumers grew more confident about the economy in January, pushing the Conference Board’s Consumer Confidence Index to the highest level since May 2010. The index is based on a sample of 5,000 households polled.

Lynn Franco, director of the Conference Board Consumer Research Center, said in a statement:

“Consumers rated business and labor market conditions more favorably and expressed greater confidence that the economy will continue to expand and generate more jobs in the months ahead. Income expectations are also more positive. Although pessimists still outnumber optimists, the gap has narrowed.”

If consumers are getting more optimistic about the economy does that mean they are likely to spend more? Maybe, maybe not. Many folks have seriously curbed their spending as the economy has struggled and are being more prudent with their money. The U.S. personal savings rate in November was at 5.3 percent, reflecting the fact that many people are more interested in socking away money than spending it.

The consumer confidence poll found that 9.8 percent of consumers said business conditions were good, compared with 7.7 percent a month earlier. Optimism about the job market also increased, with 16 percent anticipating more jobs in the coming months, up from 14.2 percent.

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