Consumer confidence improved slightly in January on a strengthening job market, but consumers also appeared concerned that labor conditions could worsen in the future, according to a survey released Tuesday by a private research group.
The Conference Board said that its Consumer Confidence Index edged up to 110.3 in January from a revised 110.0 in December. Analysts had expected a reading between 110.0 and 110.5.
Lynn Franco, director of the board’s consumer research center, said the January increase was “fueled primarily by a more favorable job market.”
She added, however, that “looking ahead ... consumers are not as optimistic as they were in December.” As a result, the index suggests just “moderate improvement” in economic growth in early 2007.
January’s reading was the highest since 110.7 in March 2002 and matched a reading of 110.3 in May 2002, the Conference Board said.
The reading, which is based on a survey of 5,000 U.S. households by the New York-based research group, is closely watched because consumer confidence often signals changes in spending trends. Consumer spending makes up about two-thirds of the U.S. economy.
The Consumer Confidence Index has been buffeted in recent months by concerns about higher fuel costs and job security. But fuel prices have edged down, and the job market has held up well.
Still, the report indicated that consumers were concerned.
The Conference Board’s Present Situation Index, which measures how consumers feel about current economic conditions, rose to 133.9 in January from 130.5 in December. But the Expectations Index, which measures consumers’ outlook over the next six months, dropped to 94.5 in January from 96.3 the month before.
The report said those anticipating business conditions to worsen rose to 8 percent from 7.8 percent while those expected business conditions to get better decreased to 16.2 percent from 16.7 percent.
Asked if they expected their incomes to increase, 19.8 percent said “yes” in January, down from 21.4 percent in December.