Consumer Sentiment Rises in January

A closely watched gauge of consumer sentiment rose in January, with Americans’ increasing confidence in the economy tempered only by doubts about jobs, an industry group reported Tuesday.

The Conference Board said its consumer confidence index rose to 96.8, the highest level since mid-2002, after a dip in December to a revised reading of 91.7.

The rise in the index, while sizable, was smaller than the expectations of analysts, who had forecast a reading of 99. The index was last this high in July 2002 when it reached 97.4.

“Growing optimism about the overall health of the economy continues to bolster consumers’ short-term outlook,” said Lynn Franco, research director for the New York-based group. “But consumers’ assessment of current conditions, which strongly hinges on improvements in the labor market, remains both weak and volatile.”

In January, a subindex measuring consumers’ assessment of current conditions rose to 80 from 74.3 in December. Those describing the present business climate as good rose to 22%, up from 18.6% in the previous month.

But that was tempered by lingering doubts about jobs. Those who said jobs were hard to get declined to 31.4% from 32.4%. However, the number who said jobs were plentiful slipped to 12.4% from 12.6%.

At the same time, Americans are increasingly optimistic in their expectations for the economy over the next six months. The gauge measuring outlook rose to 108.1 in January, up from 103.3 in December.