U.S. Consumer Confidence Declines in January
by:Tom Moeller
|in:Economy in Brief
Summary
- 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.
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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