WASHINGTON — Confidence among consumers unexpectedly climbed to a five-month high in January as optimism about the economy and labor market improved.
The Conference Board’s index advanced to 80.7 from a revised 77.5 in December that was weaker than initially estimated, the New York-based private research group reported Tuesday. The median forecast in a Bloomberg survey of economists called for a reading of 78.
More Americans than at any time since August 2008 said jobs were currently plentiful and the share of those viewing business conditions as good was the highest in more than six years. Bigger employment gains that lead to more wage growth will help provide a further push for sentiment and drive the consumer purchases that account for almost 70 percent of the economy.
“The labor market has been the key variable for the consumer for a very long time and people have generally been feeling a little bit better over the last three to six months because the unemployment rate has been falling,” Stephen Stanley, chief economist at Pierpont Securities in Stamford, Conn., said before the report. “Ultimately we need to see strength in income gains. If people bring home bigger paychecks, they’re going to feel pretty good about things.”