WASHINGTON — January marked the third consecutive monthly increase in the Consumer Confidence Index, rising to 114.8 from December’s 108.0, according to the latest data from The Conference Board. It is also the highest monthly reading since December 2021.
The Present Situation Index and Expectations Index also increased this month. The assessment of current business and labor market conditions jumped from 147.2 last month to 161.3, while the short-term outlook saw a small uptick from 81.9 to 83.8.
“January’s increase in consumer confidence likely reflected slower inflation, anticipation of lower interest rates ahead, and generally favorable employment conditions as companies continue to hoard labor,” said Dana Peterson, chief economist at The Conference Board. “The gain was seen across all age groups but largest for consumers 55 and over.”
According to Peterson, January’s write-in responses revealed that consumers remain concerned about rising prices, but inflation expectations fell to a three-year low.
“Average 12-month inflation expectations fell to 5.2 percent, the lowest since March 2020 (4.5%),” she said. “Expectations that interest rates will rise in the year ahead plummeted to just 41.5%.”
Here is a more detailed look at The Conference Board’s report:
Present Situation
Consumers’ assessment of current business conditions was more positive in January.
- 22.5% of consumers said business conditions were “good,” up from 21.1% in December.
- 14.2% said business conditions were “bad,” down from 17.2%.
Consumers’ appraisal of the labor market was also more positive in January.
- 45.5% of consumers said jobs were “plentiful,” up from 40.4% in December.
- 9.8% of consumers said jobs were “hard to get,” down from 13.1%.
Expectations Six Months Hence
Consumers were, on balance, slightly less optimistic about the short-term business conditions outlook in January.
- 16.6% of consumers expect business conditions to improve, down from 18.7% in December.
- However, only 16% expect business conditions to worsen, down from 17.8%.
Consumers’ assessment of the short-term labor market outlook was slightly less pessimistic in January.
- 16% of consumers expect more jobs to be available, down from 17.6% in December.
- 15.3% anticipate fewer jobs, down from 18.4%.
Consumers’ assessment of their short-term income prospects was, on balance, less pessimistic in January.
- 16.4% of consumers expect their incomes to increase, down from 18.3% in December.
- 11.5% expect their incomes to decrease, down from 13.6%.
The Consumer Confidence Survey is released on the last Tuesday of each month by The Conference Board.
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