US consumer confidence drops to 107.1 in Jan 2023: Survey

The expectations index—based on consumers’ short-term outlook for income, business, and labour market conditions—fell to 77.8 (1985=100) from 83.4 partially reversing its December gain. The present situation index—based on consumers’ assessment of current business and labour market conditions—increased to 150.9 (1985=100) from 147.4 last month, according to a survey carried out by American think tank The Conference Board.

Consumers’ assessment of current business conditions improved in January. Around 20.2 per cent of consumers said business conditions were ‘good,’ up from 19.2 per cent. Also, 19.2 per cent said business conditions were ‘bad,’ down from 19.7 per cent.

Consumers’ appraisal of the labour market was also more favourable. About 48.2 per cent of consumers said jobs were ‘plentiful,’ up from 46.4 per cent. Moreover, 11.3 per cent of consumers said jobs were ‘hard to get,’ down from 11.9 per cent.

The survey showed that consumers were more pessimistic about the short-term business conditions outlook in January. While 18.6 per cent of consumers expect business conditions to improve, down from 20.9 per cent, 21.6 per cent expect business conditions to worsen, up from 19.9 per cent.

Furthermore, consumers were less upbeat about the short-term labour market outlook. Around 17.9 per cent of consumers expect more jobs to be available, down from 20.0 per cent. About 20.1 per cent anticipate fewer jobs, up from 18.7 per cent.

“Consumer confidence declined in January, but it remains above the level seen last July, lowest in 2022,” said Ataman Ozyildirim, senior director, economics at The Conference Board. “Consumer confidence fell the most for households earning less than $15,000 and for households aged under 35.”

“Consumers’ assessment of present economic and labour market conditions improved at the start of 2023. However, the expectations index retreated in January reflecting their concerns about the economy over the next six months. Consumers were less upbeat about the short-term outlook for jobs. They also expect business conditions to worsen in the near term. Consumers’ expectations for inflation ticked up slightly from 6.6 per cent to 6.8 per cent over the next 12 months, but inflation expectations are still down from its peak of 7.9 per cent last seen in June,” added Ozyildirim.

Fibre2Fashion News Desk (NB)