Consumer confidence in the U.S. pulled back by less than expected in the month of January, according to a report released by the Conference Board on Tuesday.
The Conference Board said its consumer confidence index dipped to 113.8 in January after climbing to a revised 115.2 in December. Economists had expected the index to drop to 111.9 from the 115.8 originally reported for the previous month.
The modest decrease by the headline index reflected weakened expectations about short-term growth prospects, with the expectations index falling to 90.8 in January from 95.4 in December.
The percentage of consumers expecting business conditions to improve slipped to 23.8 percent from 25.4 percent, while those expecting conditions to worsen inched up to 19.0 percent from 18.6 percent.
Consumers were also less optimistic about the short-term labor market outlook, with those expecting more jobs to be available in the months ahead falling to 22.7 percent from 24.2 percent and those expecting fewer jobs ticking up to 15.7 percent from 14.7 percent.
Meanwhile, the report showed the present situation index climbed to 148.2 in January from 144.8 in December, reflecting a more favorable appraisal of current business conditions.
The percentage of consumers saying conditions were “good” rose to 21.1 percent from 19.4 percent, while those saying conditions were “bad” slipped to 25.6 percent from 27.1 percent.
The Conference Board noted consumers’ assessment of the labor market was mixed, as 55.1 percent said jobs were “plentiful,” down from 55.9 percent, but the percentage saying jobs are “hard to get” also edged down to 11.3 percent from 11.7 percent.
“Concerns about inflation declined for the second straight month, but remain elevated after hitting a 13-year high in November 2021,” said Lynn Franco, Senior Director of Economic Indicators at The Conference Board. “Concerns about the pandemic increased slightly, amid the ongoing Omicron surge.”
She added, “Looking ahead, both confidence and consumer spending may continue to be challenged by rising prices and the ongoing pandemic.”
On Friday, the University of Michigan is scheduled to release its revised reading on consumer sentiment in the month of January.
The consumer sentiment index for January is expected to be downwardly revised to 68.7 from the preliminary reading of 68.8, which was down from 70.6 in December.
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