Latest US Consumer Confidence Index: Conference Board says optimism is restored for 2024

The United States Conference Board has released its monthly consumer confidence index figures for December 2023.

In it, the index figures rose substantially for both present and forward-looking sentiment. Its ‘expectations index’, based on consumers’ outlooks for the coming next months in relation to business, income and labour conditions, rose from 77.4 in November to 85.6. (The index rates confidence levels as able to drop to as low as 20 and up as high as 140, as compared with a 1985 baseline of 100).

Meanwhile the ‘present situations index’ similarly rose from 101 in November to 110.7 in December (as compared with a baseline of 100 in 1985), exceeding expectations.

These are the highest consumer confidence figures in almost half a year, and represent the highest increase of confidence in a single month in almost three years.

Macro-level optimism

Crucially, the part of the index which looks to six-month future timelines, reported widespread optimism about the economic climate of next year, as relating to 2023’s prevailing headwinds. In fact, according to the Conference Board’s chief economist Dana Peterson, people are already beginning to spend more in anticipation of a better year ahead:

Fear of inflation remains a top concern

Peterson continued by saying:

Why the consumer confidence index matters

Typically, consumer confidence figures are significant because they indicate the grassroots sentiment of an economy. If consumer confidence increases, this is usually followed by other signs of bullishness like increased spending for both individuals and businesses in the coming months. In this way, it’s a useful leading indicator that many analysts and experts will look to in uncertain economic times to tell them which way a market’s overall sentiment will blow in a few months’ time.

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What December's confidence spike means

In this month’s case, the figures seem to echo the sentiment of other metrics so far in rising hope for the Untied States of escaping recession, nailing the ‘soft landing’ for year-end and going into 2024 with even more hope of interest rate cuts, without the subsequent spiraling inflation.

As the Conference Board said itself in its press release on the matter: “consumers end 2023 with a surge of confidence and restored optimism for 2024”.