The Conference Board today said its consumer confidence index rose to 55.9 in January, up from 53.6 reported in December, marking the third-consecutive increase and the highest level in more than a year. The index beat economists’ January forecast of 53.5.
The report fueled another day in the green on Wall Street, marking the second day of gains spurred by consumer confidence. Investor sentiment lifted the Dow 100 points since Monday – recovering some of the losses from last week’s 550-point drop.
Despite the continuing rise in consumer confidence, the numbers don’t signal a quick fix in the economy. Consumer spending reflects 70 percent of U.S. economic activity – a reading of 90 indicates solid economic footing, and 100 or more indicates growth – a far cry from 55.9.
“Consumers’ short-term outlook, while moderately more positive, does not suggest any significant pickup in activity in the coming months,” Lynn Franco, director of The Conference Board’s Consumer Research Center, said in a statement.
Consumer confidence briefly settled at a historic low of 25.3 in February after hitting 37.4 last January; the index then took a three-month hike from March through May, buoyed by speculation of economic stabilization.
Since June, unemployment figures have contributed to index rallies between 47 and 55. Some analysts anticipate further spikes in unemployment rates in the upcoming months, which stuck through December at 10 percent, down from a 26-year high of 10.2 percent in October.