U.S. Consumer Confidence Slips in January
by:Tom Moeller
|in:Economy in Brief
Summary
- Expectations continue to fall.
- Present situation index improves.
- Inflation expectations edge higher.
The Conference Board's Index of Consumer Confidence Index fell 1.7% (-3.6% y/y) during January to 107.1 following a 7.5% December rise to 109.0, revised from 108.3. A reading of 109.5 had been expected in the Action Economics Forecast Survey for January.
The Expectations Index fell 6.7% (-12.4% y/y) to 77.8 but still has risen 12.2% during the last six months. The Present Situation Index rose 2.4% (4.4% y/y) to 150.9, the highest level in nine months.
Consumers' assessment of current business conditions improved slightly m/m as 20.2% of respondents characterized conditions as good, the most in four months. Labor market readings showed slightly more optimism this month. The jobs gap, representing the difference between respondents indicating that jobs are plentiful versus those saying jobs are hard to get, rose to 36.9% in January, the highest level also in four months. Calculated by Haver Analytics, this series has a 67% correlation with the unemployment rate over the last ten years. The jobs plentiful measure rose to 48.2 from, up 3.4% in the last three months. The jobs hard-to-get measure fell to the lowest level in four months.
A lessened 18.6% of respondents felt that business conditions would get better in six months. Eighteen percent of respondents felt there would be more jobs in six months, up from a low of 15.1% in July. A steady 17.2% expected income to increase in six months, still up from a 15.3% July low.
The expected inflation rate in twelve months increased to 6.8%. It remained below the 7.9% high in June of last year but remained higher than the 4.4% low in January 2020.
The share of respondents planning to buy a home within six months fell to 6.3% in January from 6.6% in December, still higher than its 4.5% July low. Those planning to buy a major appliance held steady at 44.8% of respondents this month after surging to 52.4% in October. It remained above its 41.1% July low.
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.
Tom Moeller
AuthorMore in Author Profile »Prior to joining Haver Analytics in 2000, Mr. Moeller worked as the Economist at Chancellor Capital Management from 1985 to 1999. There, he developed comprehensive economic forecasts and interpreted economic data for equity and fixed income portfolio managers. Also at Chancellor, Mr. Moeller worked as an equity analyst and was responsible for researching and rating companies in the economically sensitive automobile and housing industries for investment in Chancellor’s equity portfolio. Prior to joining Chancellor, Mr. Moeller was an Economist at Citibank from 1979 to 1984. He also analyzed pricing behavior in the metals industry for the Council on Wage and Price Stability in Washington, D.C. In 1999, Mr. Moeller received the award for most accurate forecast from the Forecasters' Club of New York. From 1990 to 1992 he was President of the New York Association for Business Economists. Mr. Moeller earned an M.B.A. in Finance from Fordham University, where he graduated in 1987. He holds a Bachelor of Arts in Economics from George Washington University.
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