WASHINGTON -- Retailers are getting good news about consumer confidence levels, measures often used as indicators of future shopper spending. Consumer confidence hit its highest point of 1996 in December, attaining a second consecutive monthly gain, according to the Conference Board's latest survey.
The confidence level in December stood at 113.8, up 4.3 points from November's revised figure, which itself had risen two points from October. The year began with its lowest confidence level, 88.4 in January, but essentially mirrored the economy's growth ever since.
"Consumers are in much better spirits than they were in the beginning of the year [1996] because almost 30% [of those surveyed] say jobs are more plentiful," said Lucie Blau, an economist with the Conference Board's Consumer Research Center in New York. "And less than 6% of the survey households see a slowdown in economic activity. That's the lowest figure in eight years."
The rise in consumer confidence suggests that consumer demand will help pave the way for a healthy economy during the first half of 1997, she said.
Blau said the rise in December's consumer confidence level was due primarily to the five-point increase over November in its component measuring consumer expectations for the next six months. Another component, the "Present Situation Index," also increased, rising three points in December to 136.4, which continues to be a seven-year high.
But while consumer confidence is increasing, other statistics demonstrate that the economy's growth has a slow pace, said Robert Barr, assistant economist at the U.S. Chamber of Commerce.
"The concern we have is that there has been a slowdown in job creation," he said.
Barr also noted that consumer credit spending growth slowed from double-digit figures during the summer to 2.3% in October when compared with the same period during the previous year.
The survey of 5,000 households showed a slight increase in the percentage of consumers calling current business conditions "bad," from 12.6% in November to 13.8% in December. Nearly 30% said conditions are "good," up from 29.4% in November.
Consumers were a little more optimistic about the next six months, however. In December, 14.9% predicted "better" conditions, up 0.2% from November. Those predicting "worse" conditions dipped from 8.2% in November to 5.9% in December.
