Consumer confidence in US improves on outlook for economy

[WASHINGTON] US consumer confidence rose in January as Americans grew more upbeat about the outlook for the economy and job market in light of further fiscal aid and the distribution of coronavirus vaccines.

The Conference Board's index of sentiment increased to 89.3 from a revised 87.1 reading in December, according to a report on Tuesday. The median forecast in a Bloomberg survey of economists called for a reading of 89.

The gauge of expectations rose to a three-month high of 92.5, while a measure of sentiment about current conditions decreased to 84.4, the worst reading since May.

The overall improvement in sentiment follows last month's passage of a US$900 billion aid package and coincides with a proposed US$1.9 trillion in additional stimulus. While the confidence index remains well below pre-pandemic levels as the health crisis prompts tighter restrictions on activity, a more widespread roll out of the vaccine and additional financial assistance could shore up sentiment.

"Consumers' appraisal of present-day conditions weakened further in January, with Covid-19 still the major suppressor," Lynn Franco, senior director of economic indicators at the Conference Board, said in a statement. "Consumers' expectations for the economy and jobs, however, advanced further, suggesting that consumers foresee conditions improving in the not-too-distant future."

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