Although some positive economic news has circulated lately, consumer confidence was still shaky in January, according to the Conference Board Consumer Confidence Index study.
The Present Situation Index, based on consumer assessment of current business and labor market conditions, advanced to 150.9 from 147.4 the month earlier. The Expectations Index, based on consumers’ short-term outlook for income, business and labor market conditions, fell to 77.8 from 83.4 in December. The conference board pointed out that the Expectations Index is below 80, which often signals a recession within the next year. The organization revised both the present situation and expectations indexes up slightly in December.
“Consumer confidence declined in January, but it remains above the level seen last July, lowest in 2022,” said Ataman Ozyildirim, senior director, economics at The Conference Board. “Consumer confidence fell the most for households earning less than $15,000 and for households aged under 35.”
Ozyildirim added that consumer “assessment of present economic and labor market conditions improved at the start of 2023. However, the Expectations Index retreated in January reflecting concerns about the economy over the next six months. Consumers were less upbeat about the short-term outlook for jobs. They also expect business conditions to worsen in the near term. Despite that, consumers expect their incomes to remain relatively stable in the months ahead. Meanwhile, purchasing plans for autos and appliances held steady, but fewer consumers are planning to buy a home, new or existing. Consumers’ expectations for inflation ticked up slightly from 6.6% to 6.8% over the next 12 months, but inflation expectations are still down from its peak of 7.9% last seen in June.”
