Consumer confidence reached its highest levels in 15 years – optimism reflected in strong sales figures for this holiday season. The Conference Board announced this week that its U.S. Consumer Confidence Index rose to 113.7 in December, the highest level since August 2001 and more than the original index forecast of 109.
Consumer expectations for the next six months are strong, reaching their highest level since December 2003. More consumers also said they expect increased job availability and rising incomes. However, Americans’ assessment of current conditions decreased from November to December, with a 2% increase in those who feel business conditions currently are “bad.”
Consumer optimism increased among 35- to 54-year-olds and is the highest since July 2007 among Americans 55 and older. Confidence decreased among those 35 and younger.
“The post-election surge in optimism for the economy, jobs and income prospects, as well as for stock prices which reached a 13-year high, was most pronounced among older consumers,” said Lynn Franco, the Conference Board’s director of economic indicators. “Looking ahead to 2017, consumers’ continued optimism will depend on whether or not their expectations are realized.”
The report follows a healthy holiday sales period for retailers. Research firm Customer Growth Partners announced this week that holiday shoppers increased sales in the U.S. to its biggest jump since 2005. The firm upwardly revised its sales estimate to a 4.9% increase over last year to $637 billion. Its original forecast was a 4.1% increase. Online sales increased 15%, up more than a percentage point over last year.
The National Retail Federation (NRF) reported last month that more shoppers made purchases during Black Friday weekend this year compared to 2015, but that they spent 3.5% less on average – symptomatic of the heavy discounting that occurs on Black Friday weekend and throughout the holiday season.
Earlier this month, the Federal Reserve voted to raise interest rates in light of recent positive economic indicators, and also upwardly revised its GDP growth expectations for 2016.
The promotional industry has also showed recent signs of strengthening, including a third-quarter distributor revenue increase of 3.1% [http://www.asicentral.com/news/newsletters/promogram/october-2016/distributor-q3-revenue-increases-by-31/] and a rise in the Counselor Confidence Index, which measures distributors’ health and optimism.