According to data released by the Conference Board on Wednesday, American consumers' confidence in the U.S. economy increased in December as high inflation continued to decline.
The most recent consumer confidence index from the business think tank showed a level of 108.3 this month, a considerable increase from the upwardly revised figure of 101.4 in November and the highest value for the indicator since April 2022.
According to consensus projections on Refinitiv, economists anticipated the index to end up at 101.
"The Present Situation and Expectations Indexes improved due to consumers' more favorable view regarding the economy and jobs," Lynn Franco, senior director of economic indicators at the Conference Board, said in a statement. "Inflation expectations retreated in December to their lowest level since September 2021, with recent declines in gas prices a major impetus."
Consumer confidence, as assessed by this and other surveys such as the University of Michigan's consumer sentiment index, has largely been declining throughout 2022 as the country dealt with the greatest rates of inflation in four decades.
The headline consumer confidence index averaged 128.5 points in 2019.
According to AAA, the national average price of regular gasoline fell to $3.11 per gallon on Wednesday. Prices for gasoline haven't been this low since July 2021.
"You'd have to be hiding under a rock not to see gasoline prices at the pump have plummeted nearly two dollars from the $5 high in June this year," Christopher S. Rupkey, chief economist for FwdBonds said in a statement. "The consumer was more worried about higher prices than they were trying to get a new higher paying job, but now they are becoming more confident with price pressures easing in intensity."
According to the Conference Board, the most recent study revealed that while consumer spending intentions for trips increased, those for homes and expensive appliances decreased.
The National Association of Realtors issued data on home sales in the U.S. on Wednesday, showing that they fell in November for the tenth straight month, falling 7.7% from October. When the pandemic brought the real estate market - and much of everything else - to a standstill in May 2020, home sales were at their lowest point ever.
Due in part to a robust labor market, higher levels of savings, and plenty of pent-up demand from the epidemic, consumers were able to remain reasonably resilient and keep spending throughout much of the year despite the constant economic headwinds.
These spending patterns, however, appear to be slowing.
Retail sales in the U.S. decreased substantially in November, according to figures provided by the Commerce Department last week.
