Consumers end 2004 on a high note.

Author:Franco, Lynn
 
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December Results

The Conference Board's Consumer Confidence Index, which had been on the decline since August, rebounded in December. The Index now stands at 102.3 (1985=100), up from 92.6 in November. The Expectations Index rose to 99.9 from 90.2 last month. The Present Situation Index increased to 105.9 from 96.3.

The Consumer Confidence Survey is based on a representative sample of 5,000 U.S. households. The monthly survey is conducted for The Conference Board by TNS NFO. TNS NFO is one of the TNS group of companies (LSE: TNN). The cutoff date for December's preliminary results was December 20th.

Consumers' assessment of current conditions was significantly more favorable than last month. The percentage claiming business conditions are "good" increased to 24.4 percent from 23.2 percent, while respondents claiming conditions are "bad" tell to 17.8 percent from 20.2 percent. The employment picture also improved in December. Consumers saying jobs are "plentiful" increased to 19.4 percent from 17.1 percent, while those claiming jobs are "hard to get" declined to 26.4 percent from 28.0 percent.

Consumers' short-term outlook was more upbeat than a month ago. Those anticipating business conditions to worsen fell to 7.7 percent from 11.4 percent. Consumers expecting business conditions to improve rose to 22.0 percent from 20.3 percent last month. The labor market outlook was also more optimistic. Consumers expecting fewer jobs to become available in the coming months declined to 15.5 percent from 19.3 percent. However, those anticipating more jobs to become available eased to 16.2 percent from 17.6 percent. The proportion of consumers expecting their incomes to improve in the months ahead edged up to 20.7 percent from 19.2 percent last month.

The continuing economic expansion, combined with job growth, has consumers ending the year on a high note. The most significant contributor to the rebound in confidence has been the overall improvement in current conditions over the past twelve months. The Present Situation Index now stands at 105.9, up from 86.1 in January 2004. And while expectations are below earlier levels, 99.9 in December versus 105.3 in January, consumers are confident that the economy will continue to expand in 2005.

Consumer Confidence and Buying Plans Based on surveys conducted by TNS NFO Percentage of households = 100% 2003 2004 All series seasonally adjusted Dec. Jan. Feb. Mar. Composite Series: Index Numbers, 1985=100 Consumer Confidence Index 94.8 97.7 88.5 88.5 Present Situation 76.0 86.1 83.3 84.4 Expectations 107.4 105.3 91.9 91.3 Appraisal of Present Situation: Percent Business Conditions Good 18.1 21.8 19.3 20.7 Bad 23.7 23.1 23.2 23.1 Normal 58.2 55.1 57.5 56.2 Employment Jobs plentiful 13.0 14.9 14.5 14.7 Jobs not so plentiful 55.6 55.4 56.6 55.4 Jobs hard to get 31.4 29.7 28.9 29.9 Expectations for Six Months Hence: Percent Business Conditions Better 28.0 27.0 19.5 19.5 Worse 6.8 6.9 9.6 9.7 Same 65.2 66.1 70.9 70.8 Employment More jobs 21.2 20.0 16.4 15.7 Fewer jobs 15.1 15.2 18.8 17.3 Same 63.7 64.8 64.8 67.0 Income Increase 21.7 18.2 17.1 18.0 Decrease 9.6 8.6 8.4 10.1 Same 68.7 73.2 74.5 71.9 Plans to Buy Within Six Months: Percent Automobile Yes 6.2 6.7 7.2 5.4 New 2.8 2.5 2.9 2.3 Used 2.7 3.1 3.2 2.4 Uncertain 0.7 1.1 1.1 0.7 Home Yes 3.2 3.5 3.8 4.2 New 0.8 1.0 1.3 1.4 Lived in 1.5 1.6 1.4 1.8 Uncertain 0.9 0.9 1.1 1.0 Major appliances Total plans 27.5 28.3 27.5 29.0...

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