The Conference Board Consumer Confidence Index unexpectedly increased from 77.5 in December to 80.7 percent in January. Analyst expectations were 78.3. December’s print was revised down to 77.5 from 78.1. The monthly Consumer Confidence survey, with a random sample probability design, took in data up-until January 16.
Lynn Franco, Director of Economic Indicators at The Conference Board, said “consumers’ assessment of the present situation continues to improve, with both business conditions and the job market rated more favorably. Looking ahead six months, consumers expect the economy and their earnings to improve, but were somewhat mixed regarding the outlook for jobs. All in all, confidence appears to be back on track and rising expectations suggest the economy may pick up some momentum in the months ahead.”
However, durable goods were not as positive after falling in December by the most in five months. Bookings, meant to last three years or more, fell 4.3 percent after only a 2.3 percent gain in November. Orders for aircraft fell 17.5 percent from Novembers 21.1 percent jump. Orders for non-military capital goods, ex-aircraft, also fell.
And as data was becoming more positive leading into December, analysts can now blame the polar vortex for all the bad data. Economists had no qualms excepting the abnormal gains in employment in October and November, but the poorer than expected data that could show early signs of economic retreat are rejected.
PNC Financial’s chief economist Stuart Hoffman said “clearly this is a weak report to cap off what was kind of a weak year for business investment.” He also believes business investment will strengthen this year with the budget agreement in Washington.