MACRO: US consumer confidence rises despite omicron concerns

According to today's US Conference Board survey, headline Consumer Confidence jumped to 115.8 in December from 109.5 in the previous month, beating analysts' estimates of 110.8 despite a resurgence in COVID-19 infections and reduced fiscal stimulus. It is the best reading since July, prior to the peak of the delta wave that sapped confidence later in the third quarter. The Consumer Expectations index rose to 96.9 from upwardly revised 90.2 reading in November. The Present Situation Index—based on consumers' assessment of current business and labor market conditions—was relatively flat at 144.1, down from 144.4 last month. The 1-year Consumer Inflation Rate expectation eased to 6.9% from 7.3% in November. 

Consumer confidence jumped to 115.8 which is the highest level since July. Source: Bloomberg via ZeroHedge

"Consumer confidence improved further in December, following a very modest gain in November," said Lynn Franco, Senior Director of Economic Indicators at The Conference Board. "The Present Situation Index dipped slightly but remains very high, suggesting the economy has maintained its momentum in the final month of 2021. Expectations about short-term growth prospects improved, setting the stage for continued growth in early 2022. The proportion of consumers planning to purchase homes, automobiles, major appliances, and vacations over the next six months all increased."

"Meanwhile, concerns about inflation declined after hitting a 13-year high last month as did concerns about COVID-19, despite reports of continued price increases and the emergence of the Omicron variant. Looking ahead to 2022, both confidence and consumer spending will continue to face headwinds from rising prices and an expected winter surge of the pandemic."

Still some economists expect that consumer confidence may deteriorate next month if Omicron will take a firmer foothold in the US which could in turn hamper economic activity in the first quarter.