A new survey conducted by the Conference Board reveals that consumer confidence in the economy has fallen in January, with the Consumer Confidence Index falling to 113.8. Previously, the Index reading stood at 115.2 in December. However, while confidence in the economy has fallen, the survey does reveal that inflation worries have eased and lessened. Consumers have stated that they feel comfortable in buying large, or expensive, items in six months, which is still good for the economy.
This new drop in consumer confidence comes after three straight months of increases. Worries about inflation, meanwhile, have dropped for the second month in a row, signaling that consumers are growing less worried about suffering as a result of inflation. This could be because consumers have begun to see lowering of prices, such as in the price of gas.
Economists recently revealed that the beginning of 2022 would likely see a slowing down of the economy. This Conference Board survey reignites this theory, as consumers are shown as not planning on buying too much — especially large items — in the next few weeks or months. Some other surveys do suggest that consumers are still willingly spending money at businesses right now on a large scale, even if the consumer confidence has fallen. Even with global supply chain problems, labor shortages, and the ongoing pandemic, consumers are still spending money, which is a positive aspect of the economy.
However, consumers are planning on buying large items in about six months, which signals that the economy will likely ramp up again later on in 2022 after this beginning lull in spending activity. Therefore, economists are very optimistic about the near future and how the rest of 2022 will go.
While the COVID-19 pandemic is still ongoing, there are many signs that show that consumers are experiencing pandemic fatigue and becoming desensitized to what is happening in the pandemic. As a result, this latest variant wave has not impacted how consumers spend money in a large way.
While the Omicron variant, which is highly transmissible, has hindered businesses in many ways, most of these issues come from the fact that workers have to call out when they get sick. Consumers are still purchasing items — businesses just don’t have enough workers to reach this large consumer demand. If the variant continues to spread, then this may continue to be a major issue for businesses. However, there is no data to suggest that the Omicron, or the Omicron variant alone, stopped consumers from willingly spending at businesses.
Plus, there are a few signs that point to the suggestion that this latest wave of infections from the Omicron variant is slowing down. If this is the case, then this will only help the economy, especially businesses that are struggling to have the correct amount of employees working.
Therefore, the next few weeks and the beginning months of 2022 will likely be slow, with the economy not growing too much. By summertime, however, economists are optimistic that consumers will be back in the positive mindset to buy big items, and put money back into the economy, again.