American consumers’ confidence in the US economy grew in December as high inflation continued to ease, according to data released Wednesday by the Conference Board.
The business think tank’s latest consumer confidence index registered 108.3 this month, a significant jump from the upwardly revised measure of 101.4 in November. Economists were expecting the index to come in at 101, according to consensus estimates on Refinitiv.
It’s the highest reading for the index since April 2022.
“The Present Situation and Expectations Indexes improved due to consumers’ more favorable view regarding the economy and jobs,” Lynn Franco, senior director of economic indicators at the Conference Board, said in a statement. “Inflation expectations retreated in December to their lowest level since September 2021, with recent declines in gas prices a major impetus.”
The national average for regular gasoline dropped to $3.11 per gallon on Wednesday, according to AAA. Gas prices haven’t been this low since July 2021.
“You’d have to be hiding under a rock not to see gasoline prices at the pump have plummeted nearly two dollars from the $5 high in June this year,” Christopher S. Rupkey, chief economist for FwdBonds said in a statement. “The consumer was more worried about higher prices than they were trying to get a new higher paying job, but now they are becoming more confident with price pressures easing in intensity.”
The latest survey showed that while consumers’ intentions to spend money on vacations perked up, their plans to buy homes and purchase big-ticket appliances cooled, according to the Conference Board.
In November US home sales declined for the 10th consecutive month, falling by 7.7% from October, according to National Association of Realtors data released Wednesday. Home sales are at their weakest level since May 2020, when the pandemic brought the real estate market – and much of everything else – to a standstill.
Consumer confidence, as measured by this and other surveys like the University of Michigan’s consumer sentiment index, has mostly been on a downward trajectory for much of 2022 as the country grappled with the highest rates of inflation seen in four decades.
During 2019, the headline consumer confidence index had an average reading of 128.5.
Despite the barrage of economic headwinds, consumers for much of the year remained relatively resilient and continued to spend thanks in part to a strong labor market, higher levels of savings, and plenty of pent-up demand from the pandemic.
However, those spending patterns appear to be slowing down.
US retail sales fell sharply in November, data released last week by the Commerce Department showed.
– CNN’s Anna Bahney contributed to this report