New York, Jan. 27--Consumer confidence rebounded in January to its best level since the summer of 2002, although concerns about the labor market lingered, a private research group reported.
The Conference Board said Tuesday its consumer-confidence index jumped to 96.8, following a dip in December to 91.7.
The gain put the index at its highest level since July 2002 but failed to match economists' forecast for a reading of 98, according to a survey by Dow Jones Newswires. The index was equal to 100 in 1985.
"Growing optimism about the overall health of the economy continues to bolster consumers' short-term outlook,'' said Lynn Franco, research director for the Conference Board. "But consumers' assessment of current conditions, which strongly hinges on improvements in the labor market, remains both weak and volatile."
The present-situations index rose to 80 from 74.3, while the expectations index climbed to 108.1 from 103.3.
On the job front, those respondents who said they are anticipating more jobs will become available in the next six months increased to 22.2% from 21.6%. And those expecting fewer positions to become available decreased to 14.9% from 16.9%.
But the proportion of consumers anticipating an increase in their incomes dropped to 18.9% from 21.5%.
The Conference Board's report comes on the same day that the Federal Reserve kicks off a two-day meeting to deliberate on monetary policy. There is little if any expectation among economists or financial markets that interest rates will be adjusted when policy makers conclude the meeting on Wednesday.
What will be more important is what the Fed says about the economy. Most expect the central bank will keep its tentatively upbeat assessment, even as policy makers continue to warn that already low inflation rates might fall even further.
The strength of the January confidence data won't likely play much part in the Fed's decision-making process. While closely watched by financial markets, consumer confidence measures don't merit much attention from policy makers, who have said they prefer to see what consumers actually do with their money, as opposed to what they say they will do.
The Conference Board survey is based on a representative sample of 5,000 U.S. households. The monthly survey is conducted for the Conference Board by NFO WorldGroup. The cutoff for the survey's preliminary results was Jan. 21.
