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Economy in Brief

U.S. Consumer Confidence Strengthens in December
by Tom Moeller  December 22, 2021

• Expectations improve.

• Jobs are seen as harder to find.

• Price inflation expectations ease.

The Conference Board Consumer Confidence Index increased 3.5% (33.0% y/y) to 115.8 during December from 111.9 in November, revised from 109.5. It was the highest level since July. A December reading of 110.6 had been expected in the Action Economics Forecast Survey. During all of 2021, the confidence index improved to 112.8, its highest level since 2019.

The Consumer Expectations reading rose 7.4% (11.4% y/y) to 96.9 this month from 90.2 in November, revised from 87.6. The Present Situation index eased 0.2% (+65.3% y/y) to 144.1 from 144.4 in November, revised from 142.5.

The jobs gap, representing the difference between respondents indicating that jobs are plentiful and those saying jobs are hard to get, fell to 42.6% of respondents this month from 44.7% in November, revised from 46.9%. This series has had a 75% correlation with the unemployment rate over the last ten years. The jobs plentiful measure fell to 55.1% of respondents this month. The series dates back to February 1967. The jobs hard-to-get measure rose to 12.5% of redpondents, the highest level since September. The jobs-not-so-plentiful reading fell to 32.4% of respondents. The figure is down from 51.1% averaged in 2020.

Current business conditions were perceived as good by 19.9% of respondents in December, the highest level in four months. Expectations that business conditions would improve in six months rose modestly to 26.7% of respondents but remained well below the 2020 highs. More jobs were expected in six months by a greatly improved 25.1% of respondents, the most since July. The percentage expecting rising income fell slightly in December to 18.0% of respondents and remained well below the 2019 highs.

The expected inflation rate in twelve months fell sharply to 6.9% in December from an elevated 7.3% in November, but remained up from a 4.4% low in January of last year. The share of respondents planning to buy a new home within six months rose to 0.9%, the highest level in nine months but remained below a June 2020 high of 2.0%. Those planning to buy a major appliance also rose sharply to 50.8% of respondents, an eight-month high.

Confidence of individuals under 35 years rose moderately this month to a five-month high. Confidence amongst those between 35 & 54 also surged (32.0% y/y) to an eight-month high. Confidence amongst individuals 55 and over has been relatively stable for five months, but is up 35.5% y/y.

The Consumer Confidence data are available in Haver's CBDB database. The total indexes, which are indexed to 1985=100, appear in USECON, and market expectations are in AS1REPNA.

Conference Board (SA, 1985=100) Dec Nov Oct Dec '20 2021 2020 2019
Consumer Confidence Index 115.8 111.9 111.6 87.1 112.8 101.0 128.3
   Present Situation 144.1 144.4 145.5 87.2 135.4 109.8 169.8
   Expectations 96.9 90.2 89.0 87.0 97.7 95.2 100.6
Jobs Gap (%) 42.6 44.7 43.8 -1.9 31.3 6.8 33.2
   Jobs Plentiful (%) 55.1 55.5 54.8 21.0 45.3 27.8 45.8
   Jobs Hard to Get (%) 12.5 10.8 11.0 22.9 14.0 21.0 12.6
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