Consumer Confidence Moves Back Higher In January

Consumer confidence moved back higher in January to 125.4 from an upward revised 123.1 in December and is just off November's 17-year high at 128.6. January's strength is centered in a gain for the expectations component which rose nearly 5 points to 105.5 to offset a modest slip in the present situation component which fell just over 1 point to 155.3. Part of the decline in the present situation is a small 4 tenths rise in those who say jobs are hard to get which at 16.4 percent remains very low and very favorable and won't be upsetting expectations for a strong employment report on Friday.

A negative in the report is continued weakness in inflation expectations where the 1-year outlook is down 2 tenths to 4.6 percent which for this reading is very low. In what could also be a negative, at least for contrarians, is a surge in stock-market bullishness with 51.6 percent saying the market will increase over the next year which is up more than 5 percentage points in the month.

But the consumer confidence index has in fact been tracking the stock market higher over the last year, in some contrast to the rival consumer sentiment index which has been flattening out. But today's report is another reminder that a strong jobs market is the solid foundation for the American consumer.

Recent History Of This Indicator:
Consumer confidence in January is expected to come in at 123.6 and up from December's dip to 122.1 which, however, did not reflect any slowing at all in current conditions or the assessment of the current labor market. This report rose steadily last year to 17-year highs in sharp contrast to the consumer sentiment report which has been flattening out.