Consumer confidence lifts/Housing data older news with subsequent drop in mortgage rates

The December Conference Board’s consumer confidence index jumped to 110.7 from 101 and that was well above the estimate of 104.5. Both the Present Situation and Expectations components contributed to the gain and it’s the best print since July when we saw 114.0. One yr inflation expectations were little changed at 5.6% vs 5.7% but that is the lowest since October 2020 and compares with 4.5% in February 2020.

The answers to the job questions did improve with a rise in those that see jobs as Plentiful and a drop in those who think jobs are Hard to Get. Expectations for ‘more jobs’ also rose. Income expectations were up too.

Spending intentions rose for all the main categories of autos, homes and major appliances.

The Conference Board said most of the confidence gains took place in the 35-54 yr old cohort and with income levels of $125,000 and above. Lower inflation expectations, possible Fed rate cuts and higher stock prices are driving this. With stocks, “consumers’ outlook for stock prices rose to levels of optimism last seen in mid 2021.” That said, others are dealing with the cumulative rise in inflation of about 20% over the past three years and “December’s write-in responses revealed the top issue affecting consumers remains rising prices in general, while politics, interest rates, and global conflicts all saw downticks as top concerns.”