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In December, consumer confidence in the economy improved moderately for the second month in a row, but consumers' short term prospects fell.

Consumer Confidence Ends 2009 on Mixed Note

As the real estate industry prepares to convince millions of prospective home buyers to make the greatest purchase of their lives and take advantage of Federal tax credits over the next four months, consumers may not be as receptive as hoped.

In December, consumer confidence in the economy improved moderately for the second month in a row but consumers’ short term prospects fell, which may reflect negatively on their receptiveness to making large expenditures during the first quarter.

The Conference Board Consumer Confidence Index now stands at 52.9 (1985=100), up from 50.6 in November, but the Present Situation Index declined to 18.8 from 21.2 in November.

Says Lynn Franco, Director of The Conference Board Consumer Research Center: “Consumer Confidence posted yet another moderate gain in December as expectations for the short-term future increased to the highest level in two years (Index 75.8, Dec. 2007). Regarding income, however, consumers remain rather pessimistic about their short-term prospects and this will likely continue to play a key role in spending decisions in early 2010.”

Consumers’ assessment of current-day conditions declined in December. Those claiming business conditions are “bad” increased to 46.6 percent from 44.5 percent, while those claiming conditions are “good” decreased to 7.0 percent from 8.1 percent. Consumers’ appraisal of the job market was mixed. Those claiming jobs are “hard to get” decreased to 48.6 percent from 49.2 percent, while those claiming jobs are “plentiful” decreased to 2.9 percent from 3.1 percent.

Consumers’ short-term outlook improved in December. Those anticipating business conditions will improve over the next six months increased to 21.3 percent from 19.7 percent, while those expecting conditions will worsen decreased to 11.9 percent from 14.6 percent.

The outlook for the labor market was more upbeat. The percentage of consumers expecting more jobs to become available in the months ahead increased to 16.2 percent from 15.8 percent, while those expecting fewer jobs decreased to 20.7 percent from 23.1 percent. The proportion of consumers anticipating an increase in their incomes decreased to 10.3 percent from 10.9 percent

The Consumer Confidence Survey® is based on a representative sample of 5,000 U.S. households. The monthly survey is conducted for The Conference Board by TNS. TNS is the world’s largest custom research company. The cutoff date for December’s preliminary results was December 21st.

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