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Economy in Brief

U.S. Consumer Confidence Declines in January
by Tom Moeller  January 25, 2022

• Expectations fall sharply, present situation improves.

• Jobs are easier to find.

• Price inflation expectations slip.

The Conference Board Consumer Confidence Index fell 1.2% (+30.7% y/y) to 113.8 during January after rising 2.9% to 115.2 in December, revised from 115.8. A January reading of 111.5 had been expected in the Action Economics Forecast Survey.

The Consumer Expectations index declined 4.8% in January (+3.1% y/y) to 90.8 after rising to 95.4 in December, revised from 96.9. The Present Situation index improved 2.3% this month (73.3% y/y) to 148.2 from 144.8 in December, revised from 144.1.

The jobs gap, representing the difference between respondents indicating that jobs are plentiful and those saying jobs are hard to get, fell to 43.8% and added to the December decline to 44.2%. 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 eased to 11.3% of respondents. The jobs-not-so-plentiful reading rose modestly to 33.6% of respondents but remained below last January's level of 56.2%.

Current business conditions were perceived as good by 21.1% of respondents in January, the highest level in six months. Expectations that business conditions would improve in six months fell to 23.8% of respondents and remained well below the 2020 highs. More jobs were expected in six months by a lessened 22.7% of respondents, the least since September 2021. The percentage expecting rising income fell sharply in January to 16.7% of respondents, the least since May of last year, remaining well below the 2019 highs.

The expected inflation rate in twelve months eased to 6.8% in January after falling sharply to 6.9% from 7.3% in November. It remained up from a 4.4% low in January of 2020. The share of respondents planning to buy a new home within six months rose to 0.9%, the highest level in ten months but remained below a June 2020 high of 2.0%. Those planning to buy a major appliance edged higher to 48.9% of respondents, a five-month high.

Confidence of individuals under 35 years fell m/m but remained up sharply y/y. Confidence amongst those between 35 & 54 fell 2.5% (+20.4% y/y). Confidence amongst individuals 55 and over fell to the lowest point since March 2021.

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) Jan Dec Nov Jan'21 2021 2020 2019
Consumer Confidence Index 113.8 115.2 111.9 87.1 112.7 101.0 128.3
   Present Situation 148.2 144.8 144.4 85.5 135.4 109.8 169.8
   Expectations 90.8 95.4 90.2 88.1 97.6 95.2 100.6
Jobs Gap (%) 43.8 44.2 44.7 -1.8 31.4 6.8 33.2
   Jobs Plentiful (%) 55.1 55.9 55.5 21.0 45.4 27.8 45.8
   Jobs Hard to Get (%) 11.3 11.7 10.8 22.8 14.0 21.0 12.6
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