Consumer Optimism Slips in January

U.S. consumer confidence has slipped at the start of 2022, The Conference Board reported Jan. 25, in survey results that echo those released by the University of Michigan earlier this month.

The board's Consumer Confidence Index now stands at 113.8, down slightly from 115.2 in December (with a 1985 baseline of 100) and the first decline after three months of gains. The cutoff date for preliminary January survey results was Jan. 19. 

Consumers' view of how things look now is significantly brighter than their view of how they think things will look in six months, and the gap between those widened a bit in the past month, according to The Conference Board. While the organization's Present Situation Index, which looks at consumers' evaluation of current business and labor market conditions, ticked up in January (to 148.2 from 144.8), the Expectations Index fell, and by a larger margin (to 90.8 from 95.4). 

Uncertainty surrounding both the COVID-19 pandemic and rising consumer prices, especially after December's omicron surge and inflation hitting nearly 40-year highs to close out the year, likely contributed to the moderation of consumers' economic outlook. Then, too, consumers may be anticipating a smoothing out—eventually—of some of the peaks and valleys seen in the wild ride of 2021. 

Consumer concern about inflation remains elevated but declined for a second straight month in January, The Conference Board's Lynn Franco noted in the organization's new report. In addition, the share of consumers who said they're planning a major purchase—of a home, a vehicle or a large appliance—in the next six months increased from December. 

The share of consumers who expect business conditions to improve in the next six months slipped in January, declining to 23.8% from 25.4% who said the same in December. Consumers' view of near-term labor market conditions and their own financial prospects in the next six months dimmed slightly too: 22.7% of consumers in January said they expect more jobs to be available in the months ahead, down from 24.2% in December, and 16.7% foresee their incomes rising, down from 17.5% who said the same last month.