U.S. Consumer Confidence Declines in Jan.
Consumers’ current attitudes rose even as future expectations fell. Still, the gauge of people planning to buy a home within the next six months also went up.
BOSTON – After three consecutive months of increase, the Conference Board Consumer Confidence Index declined a bit in January.
The Index now stands at 113.8, down from 115.2 in December. The Present Situation Index – based on consumers’ assessment of current business and labor market conditions – improved to 148.2 from 144.8 last month. The Expectations Index – based on consumers’ short-term outlook for income, business and labor market conditions – declined to 90.8 from 95.4.
“Consumer confidence moderated in January, following gains in the final three months of 2021,” says Lynn Franco, senior director of economic indicators at The Conference Board. “The Present Situation Index improved, suggesting the economy entered the new year on solid footing. However, expectations about short-term growth prospects weakened, pointing to a likely moderation in growth during the first quarter of 2022.”
While future optimism faded, however, it didn’t seem to impact consumers’ desire for expensive items, including homes.
“The proportion of consumers planning to purchase homes, automobiles and major appliances over the next six months all increased,” says Franco. “Meanwhile, concerns about inflation declined for the second straight month but remain elevated after hitting a 13-year high in November 2021.”
According to Franco, pandemic concerns amid the omicron surge have also had an impact.
“Looking ahead, both confidence and consumer spending may continue to be challenged by rising prices and the ongoing pandemic,” Franco says.
· 21.1% of consumers said business conditions were “good,” up from 19.4%
· 25.6% of consumers said business conditions were “bad,” down from 27.1%
· 55.1% of consumers said jobs were “plentiful,” down from 55.9%; still a historically strong reading
· 11.3% of consumers said jobs are “hard to get,” down from 11.7%
Expectations six months from now
· 23.8% of consumers expect business conditions to improve, down from 25.4%
· 19.0% expect business conditions to worsen, up from 18.6%
· 22.7% of consumers expect more jobs to be available in the months ahead, down from 24.2%
· 15.7% anticipate fewer jobs, up from 14.7%
· 16.7% of consumers expect their incomes to increase, down from 17.5%
· 12.4% expect their incomes to decrease, up from 11.2%
Toluna conducts the monthly survey, based on an online sample, for The Conference Board. The cutoff date for the preliminary results was Jan. 19.
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