Today’s report on Consumer Confidence for the month of January came in at 131.6 versus December’s reading of 128.2 and was handily above forecasts for a reading of 128.0. At this level, confidence remains stuck in the narrowing range it has occupied for the last 18 months and well above its historical average of ~95.
Breaking down this morning’s report by Present Situation and Expectations, the wide gap between the two remains well intact and near its widest levels on record. While consumers’ views toward the present are near twenty-year highs, sentiment towards the future has been stuck in a sideways range. For more than three years now, consumers have been expecting their optimistic views of current conditions to deteriorate in the future, but at this point those concerns have never materialized.
One reason the less optimistic outlooks have yet to materialize is that the job market remains strong. Despite some mixed signals towards the end of last year, nearly half of all consumers say jobs are ‘plentiful’ which is near the highest levels on record.
The strong job market is also fueling improved sentiment among the lowest paid US consumers. While sentiment levels have stalled out among consumers with incomes of $35K and above, confidence among consumers with incomes of $15K or less has surged in recent months. In fact, over the last seven months, confidence levels among this income cohort have seen two of their five largest m/m gains on record (January 2020 and July 2019). Start a two-week free trial to Bespoke Institutional for full access to our research and interactive tools.