After an increase in December, the Conference Board Consumer Confidence Index declined in January. after an increase in December. The Index now stands at 113.8 (1985=100), down from 115.2 in December.
The index which is based on the consumers' assessment of current business and labor market conditions -- Present Situation Index—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,” said 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. Nevertheless, the proportion of consumers planning to purchase homes, automobiles, and major appliances over the next six months all increased.
“Meanwhile, concerns about inflation declined for the second straight month, but remain elevated after hitting a 13-year high in November 2021. Concerns about the pandemic increased slightly, amid the ongoing Omicron surge. Looking ahead, both confidence and consumer spending may continue to be challenged by rising prices and the ongoing pandemic.”
Present Situation
Consumers’ appraisal of current business conditions was more favorable in January.
- 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%.
Consumers’ assessment of the labor market was mixed.
- 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 Hence
Consumers’ optimism about the short-term business conditions outlook declined in January.
- 23.8% of consumers expect business conditions will improve, down from 25.4%.
- 19.0% expect business conditions to worsen, up from 18.6%.
Consumers were also less optimistic about the short-term labor market outlook.
- 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%.
Consumers were slightly less positive about their short-term financial prospects.
- 16.7% of consumers expect their incomes to increase, down from 17.5%.
- 12.4% expect their incomes will decrease, up from 11.2%.
