American consumers were feeling less confident in January amid elevated prices and a Covid-19 resurgence, but their views of the economy and inflation were growing more positive, a survey released Tuesday showed.
The Conference Board’s consumer confidence index declined to 113.8 in January, less than two points below where it was in December but above analysts’ forecasts, with the data showing Americans feeling better about the economy today but less certain about its short-term future.
The survey indicated a slight downturn in consumers’ expectations for inflation amid a surge in prices across the United States.
However the Conference Board’s senior director of economic indicators, Lynn Franco, noted “both confidence and consumer spending may continue to be challenged by rising prices and the ongoing pandemic.”
The share of respondents indicating business conditions were “good” ticked up to 21.1 percent, while those viewing them as “bad” fell to 25.6 percent. The changes for both were under two points.
The share of consumers expecting business conditions to worsen in the next six months rose slightly to 19 percent, while 23.8 percent expect them to improve, down from 25.3 percent in December.
The share of consumers describing jobs as plentiful fell slightly as well but the survey noted its current 55.1 percent level was “historically strong.”
Meanwhile, respondents’ expectations for the inflation rate 12 months ahead fell to 6.8 percent, its lowest level since September.
“Consumer confidence will remain highly sensitive to health conditions, inflation and labor market headwinds in the near term,” particularly with the Omicron variant of Covid-19 causing a renewed wave of infections nationwide, Mahir Rasheed of Oxford Economics said.
He predicted a rebound in the second quarter after a slowdown in the remainder of the first quarter.
