With cases of the Omicron variant rising along with prices, January is turning out to be a rough month for consumers. The Conference Board reports that consumer confidence declined this month, with the index falling nearly two points from December.
In particular, consumers appear to have concerns about the future. 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. However, expectations about short-term growth prospects weakened, pointing to a likely moderation in growth during the first quarter of 2022.”
The survey found that some consumers have yet to feel any meaningful impact from inflation, but others have. The word “inflation” has begun to show up in reviews that consumers post about a wide range of companies.
Brenda, of Grand Saline, Texas, recently had a medical procedure and really needed her recently canceled Synchrony credit card.
“I had counted on my credit cards to help pay for necessities so that I can pay the high cost of blood thinners that I will need to keep the stent from becoming blocked,” Brenda wrote in a ConsumerAffairs review. “Our income is too high for assistance, but with inflation, it's not enough to make ends meet.”
Inflation worries still high
Franco says that, overall, the monthly survey found slightly fewer concerns about inflation. However, rising prices remain a background concern after hitting a 13-month high in November.
“Concerns about the pandemic increased slightly, amid the ongoing Omicron surge,” Franco said. “Looking ahead, both confidence and consumer spending may continue to be challenged by rising prices and the ongoing pandemic."
That said, the survey found that the percentage of consumers who are planning to purchase homes, automobiles, and major appliances over the next six months all increased.