Consumer confidence increases but planned expenditures for durable goods declines.

Consumers appear to be more optimistic about the 2007 economy according to BIGresearch’s January Consumer Intentions and Actions Survey (CIA) of 7,700 respondents. Consumer confidence increased to 50.5% in January versus 46.9% in December, indicating greater consumer optimism as the new year begins.

The decline in the price of gas may be stimulating the increase of optimism as more consumers in January said gas prices weren’t having an impact on their spending (33.1% vs. 29.4% in December). In addition, milder than normal temperatures for the eastern half of the U.S. are bringing good news from the post man in the form of lower home heating bills.

However, the increase in confidence is tempered by a more cautious consumer who may be trying to work off the extra debt accumulated from holiday spending. Fewer consumers in January said they plan on making major purchases on items such as automobiles, computers, furniture and appliances. Unfortunately, housing is not up, but its also not down as it remained flat from December.

Consumers are also starting out the new year by attempting to put their wallets on a diet with paying down debt (38.3%) and increasing savings (30.3%) being the top two financial plans. However, it may be difficult for consumers to stick to their financial diets as the percentage of consumers becoming more practical in purchasing declined from December’s 40.8% to 39.6% and fewer consumers claim to be budget conscious (36.5% vs. 38.5%).

Other highlights from the January CIA survey include:

— Wal-Mart was #1 in Women’s Clothing (12%), but their share was down from last January when it was 18.5%

— Investors’ confidence in the stock market increased to 68.6% from 65.0% in December

— Payless maintained a slight lead over Wal-Mart in shoes, 12.5% to 10.6%

— Best Buy topped electronics category

— Wal-Mart was leader in grocery and HBA

— 90 day outlook for all merchandise groups were off from December, but up from January 2006

— Big ticket purchases including autos, computers, furniture, home appliances and housing declined from December, but were up versus January 2006.

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