U.S. Consumer Confidence Surges Most Since 2021 In Broad Upturn
US consumer confidence rose in December by the most since early 2021 as Americans grew more upbeat about the labor market and the inflation outlook.
(Bloomberg) -- US consumer confidence rose in December by the most since early 2021 as Americans grew more upbeat about the labor market and the inflation outlook.
The Conference Board’s index increased to 110.7 in December from a revised 101 reading in November, data published Wednesday showed. The median estimate in a Bloomberg survey of forecasters called for a 104.5 reading.
A measure of expectations — which captures the outlook for about six months out — advanced as consumers saw better business conditions, incomes and labor-market prospects. Expected inflation a year ahead fell to the lowest level since late 2020.
Meanwhile a gauge of current conditions rebounded from the lowest reading in more than two years.
The report showed optimism across the board, from job prospects and inflation to future incomes and business conditions. More Americans said they are planning to go on vacation, buy a car or purchase big appliances. The results point to an economy holding up well going into 2024.
“December’s increase in consumer confidence reflected more positive ratings of current business conditions and job availability, as well as less pessimistic views of business, labor market, and personal income prospects over the next six months,” Dana Peterson, chief economist at the Conference Board, said in a statement.
Despite the improvement in the inflation outlook, the top issue remained rising prices, while concerns about politics, interest rates, and global conflicts all receded, she said.
Labor-market sentiment improved from November. The share of consumers who said jobs were plentiful rose to a five-month high. The difference between those saying jobs are plentiful versus hard to get — a metric watched by economists to gauge labor-market strength — jumped by the most since early 2022.
Buying plans also improved, with a greater share of consumers reporting they planned to buy a car, home or major appliance. The share of respondents expecting lower interest rates over the coming year increased to the highest level since October 2020.
The perceived likelihood of a recession over the next year fell to a fresh low for 2023. About two-thirds of Americans still see a downturn as a possibility for 2024, even as economists have walked back such forecasts amid ongoing strength in the economy.
(Updates with charts.)
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