US consumers are pessimistic about the economic situation for the next six months, and their confidence worsened more than expected in January, according to the index published on Tuesday by the Conference Board. The general index stood at 107.1 points against 109 in December, disappointing analysts who expected 108.1 points according to the Briefing.com consensus.
In detail, among the two sub-indices, only the one measuring expectations for the economic situation for the next six months is down. But it falls to 77.8 points, below the 80 point mark, which “often signals a recession in the coming year“, clarifies the Conference Board in its press release. The second sub-index, which measures the perception of the current situation, is on the rise.
“Consumer confidence fell in January but remains above the level of last July, the lowest in 2022“, nuances Ataman Ozyildirim, senior director of finance at the Conference Board. But the deterioration in their expectations reflects “(consumer) concerns about the economy over the next six months“, he emphasizes. They really are”less optimistic about short-term job prospects“, and”foresee a worsening of economic conditions in the short term“, Ataman Ozyildirim further specified.
The fight against high inflation has actually required a slowdown in economic activity. But it could push the world’s largest economy into recession this year. “Consumer confidence was weaker than expected in January. Consumer sentiment has yet to show significant improvement, although inflation is slowing and job growth remains strong“, emphasizes Rubeela Farooqi, chief economist of HFE. She means that”the outlook is uncertain“and”slower job growth and lower savings going forward may be a limitation for households in 2023“.
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Another index measuring consumer confidence, measured by the University of Michigan, painted a different picture for the month of January, showing a slight increase in optimism, despite an index still at a historic low. Inflation fell sharply in December to 6.5% over a year against 7.1% according to the CPI index to which pensions are indexed.