Consumer confidence rises again in January

Consumer confidence rose in January, reinforcing December's rebound.

The Conference Board Consumer Confidence Index rose to 80.7, vs. up from 77.5 in December. The index started at 100 in 1985. The independent business membership and research association's index also showed increasingly optimistic assessments of current and future conditions.

"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," said said Lynn Franco, Director of Economic Indicators at The Conference Board.

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The Conference Board's index is based on a monthly survey by Nielsen, a leading global provider of information and analytics around what consumers buy and watch. The cutoff date for the preliminary results was January 16.

According to the survey, respondents who said business conditions are "good" increased to 21.5% in January from 20.2% in December. People who said business conditions were bad fell slightly, to 22.8%, from 23.2%. And consumers were slightly more optimistic about the job market, with 12.7% saying jobs were plentiful, vs 11.9 percent in December. Still, 32.6% said jobs are hard downs slightly from 32.9%

Looking into the future, consumers were somewhat more muted. Those expecting better business conditions the next six months remained unchanged at 17.4%, but those who thought things would get worse fell to 12.1% from 13.9%.

Because nearly two-thirds of the economy depends on consumer spending, the Conference Board's monthly survey is an important indicator of future economic activity. One hopeful sign: 15.8% of those surveyed expected their incomes to rise in the months ahead, vs. 13.9% in December.

"Given the increased optimism on the part of consumers about future earnings, the momentum behind the stronger consumer spending observed in the fourth quarter of last year looks like it can be maintained in the new year," Wells Fargo senior economist! Mark Vitner said in a letter to clients. He warned, however, that consumer confidence is extremely sensitive to political unrest in Washington -- and the looming fight over raising the federal debt ceiling could rattle consumers next month.