Consumer Confidence Index increased

Lynn Franco

A measure of consumer confidence continues to increase on more upbeat expectations for business and labor conditions.

The Conference Board reported its Consumer Confidence Index climbed to 115.8 in December. That’s a gain of 3.9 points over a reading that was revised upward for November.

For December, a component of the index tracking current assessments edged down even as component tracking expectations increased.

“Expectations about short-term growth prospects improved, setting the stage for continued growth in early 2022,” said Lynn Franco, senior director of economic indicators at the Conference Board.

The proportion of consumers planning to purchase homes, cars and major appliances as well as go on vacations over the next six months increased, Franco said.

Concerns about inflation subsided after hitting a 13-year high in November. Worries about the COVID-19 pandemic also decreased despite the emergence of the omicron variant, she said.

Those challenges will persist, however, Franco said. “Looking ahead to 2022, both confidence and consumer spending will continue to face headwinds from rising prices and an expected winter surge of the pandemic.”

The Conference Board, a member-driven think tank in New York, bases the Consumer Confidence Index on the results of monthly household surveys. 

Economists monitor the index because consumer spending accounts for more than two-thirds of economic activity.

Less optimistic assessment of current business and labor conditions pulled down the present situation component of the index three-tenths of a point from November to 144.1.

The proportion of consumers responding to the survey upon which the December index was based who described business conditions as “good” increased two points to 19.9 percent. The share of those who said conditions were “bad” decreased a half point to 26.8 percent.

The proportion of those who called jobs “plentiful” retreated four-tenths of a point to 55.1 percent. The share of those who said jobs were “hard to get” advanced 1.7 points to 12.5 percent.

A more upbeat outlook pushed up the expectations component of the index 6.7 points to 96.9.

The share of consumers who said they expect business conditions to improve over the next six months rose 1.1 points to 26.7 percent. The proportion of those who said they anticipate worsening conditions fell 1.7 points to 17.9 percent.

The share of those expecting more jobs to become available in coming months increased 2.3 points to 25.1 percent. The proportion of those who forecasted fewer jobs decreased 4.2 points to
14.8 percent.

While 18 percent of consumers said they expect their incomes to increase — down nine-tenths of a point from November — 11.5 percent said they anticipated lower incomes. That’s down two-tenths of a point.