After two months of declines, the Confidence Index rose to 108.3 after last month’s 101.4. A preference for services and lower desire for big-ticket items continued.
BOSTON – Americans grew a bit more optimistic in December after two months of declines, according to the latest Conference Board Consumer Confidence Index.
The Index now stands at 108.3, up sharply from 101.4 in November.
The Present Situation Index – based on consumers’ assessment of current business and labor market conditions – increased to 147.2 from 138.3 last month.
The Expectations Index – based on consumers’ short-term outlook for income, business, and labor market conditions – improved to 82.4 from 76.7. However, Expectations are still lingering around 80 – a level associated with recession.
“Consumer confidence bounced back in December, reversing consecutive declines in October and November to reach its highest level since April 2022,” says Lynn Franco, senior director of economic indicators at The Conference Board.
“The Present Situation and Expectations Indexes improved due to consumers’ more favorable view regarding the economy and jobs,” adds Franco. “Inflation expectations retreated in December to their lowest level since September 2021, with recent declines in gas prices a major impetus. Vacation intentions improved, but plans to purchase homes and big-ticket appliances cooled further.”
Franco expects the consumer shift from big-ticket items to services to continue in 2023, “as will headwinds from inflation and interest rate hikes.”
Present situation in December
- 19.0% of consumers said business conditions were “good,” up from 17.8%
- 20.1% said business conditions were “bad,” down from 23.6%
- 47.8% said jobs were “plentiful,” up from 45.2%
- 12.0% said jobs were “hard to get,” down from 13.7%
Future expectations – six months from now
- 20.4% of consumers expect business conditions to improve, up from 19.8%
- 20.3% expect business conditions to worsen, down from 21.0%
- 19.5% expect more jobs to be available, up from 18.5%
- 18.3% anticipate fewer jobs, down from 21.2%
- 16.7% expect their incomes to increase, down slightly from 17.1%
- However, 13.3% expect their incomes to decrease, down from 15.8%
Toluna conducts the monthly Consumer Confidence Survey for The Conference Board. The cutoff date for the preliminary results was Dec. 15.
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