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New York, NY—Consumer confidence dipped slightly in January, after three months of gains at the end of 2021. The Conference Board Consumer Confidence Index now stands at 113.8 (1985=100), down from 115.2 in December. But The Conference Board’s Leading Economic Index (LEI) for the United States increased 0.8% in December 2021 to 120.8 (2016 = 100), following 0.7% increases each in November and October 2021.

“The U.S. LEI ended 2021 on a rising trajectory, suggesting the economy will continue to expand well into the spring,” said Ataman Ozyildirim, senior director of economic research at The Conference Board. “For the first quarter, headwinds from the Omicron variant, labor shortages, and inflationary pressures—as well as the Federal Reserve’s expected interest rate hikes—may moderate economic growth. The Conference Board forecasts GDP growth for Q1 2022 to slow to a relatively healthy 2.2 percent (annualized). Still, for all of 2022, we forecast the US economy will expand by a robust 3.5 percent—well above the pre-pandemic trend growth.”

The Conference Board Coincident Economic Index (CEI) for the United States increased by 0.2% percent in December to 107.4 (2016 = 100), following a 0.1% increase in November and a 0.5% increase in October, and the Board’s Lagging Economic Index (LAG) for the United States increased by 0.2% in December to 109.4 (2016 = 100), following a 0.1% increase in November and a 0.3% increase in October.

In terms of consumer confidence, The Conference Board’s Present Situation Index—based on consumers' assessment of current business and labor market conditions—improved to 148.2 in January from 144.8 in December, but the Expectations Index—based on consumers' short-term outlook for income, business, and labor market conditions—declined to 90.8 from 95.4. 

"Consumer confidence moderated in January, following gains in the final three months of 2021," said Lynn Franco, senior director of economic indicators at The Conference Board. "The Present Situation Index improved, suggesting the economy entered the new year on solid footing.” Although expectations about short-term growth prospects weakened, the proportion of consumers planning to purchase homes, automobiles, and major appliances over the next six months all increased, she said.

Concerns about inflation declined for the second straight month, but remain elevated after hitting a 13-year high in November 2021. Concerns about the pandemic increased slightly amid the ongoing Omicron surge. Franco said both confidence and consumer spending may continue to be challenged by rising prices and the ongoing pandemic. 

But putting these consumer confidence numbers in context shows a much clearer picture. 18 months ago, in July 2020—another period when COVID numbers began to recede in some areas, businesses were open again, and consumers were starting to return to a more normal level of activity—the Index stood at 92.6, 21.2 points lower than its present level. The Present Situation Index stood at 94.2, compared with 148.2 now, a 54-point difference. Only the Expectations Index was comparable: 90.8 now, vs. 91.5 in 2020, less than one point difference. 

The monthly Consumer Confidence Survey®, based on an online sample, is conducted for The Conference Board by Toluna with a panel of over 36 million consumers. The cutoff date for the preliminary results was January 19.