By Lucia Mutikani

WASHINGTON, (Reuters) – U.S. consumer confidence fell slightly in January. More Americans planned to buy homes and automobiles, even though they were less confident about the future of business and labor markets.

According to the Conference Board’s Tuesday survey, inflation expectations of consumers remained high for the second month. The shift in their views on the labor market is likely due to the disruptions caused by COVID-19’s winter wave, which was fueled by Omicron.

Robert Frick from Navy Federal Credit Union said, “While consumer confidence fell this month,” but consumers have faith that the recovery will be strong, despite this.

According to the Conference Board, Tuesday’s consumer confidence index reading fell from 115.2 December to 113.8 in January. Reuters polled economists to forecast that the index will fall to 111.8. Although the index fell for the first time in 4 months, it is still well above its pandemic lows.

Surveyors place more importance on the labour market. This is tightening due to shortages of workers.

According to Omicron, the current conditions index rose in the survey. This indicates that the economy enters 2022 on a strong foundation. But, the gauge of economic expectations for growth in short-term fell.

(Graphic: Consumer confidence, https://graphics.reuters.com/USA-STOCKS/egpbkjzjmvq/consconf.png)

A Reuters analysis shows that the United States has an average number of 696 541 new coronavirus cases per day. However, infections seem to be decreasing in certain regions, such as New York City, which is the most affected.

Daniel Silver, an economist from JPMorgan (NYSE 🙂 in New York said that “it is probable that the tight labor markets is supporting the Conference Board Data because the Survey emphasizes the Job Market.”

From December’s 44.2, the Conference Board’s labor market differential (derived from responses to questions about job availability and difficulty) fell to 43.8. This is the Labor Department’s unemployment rate. End of November saw 10.6 million open jobs.

EASE INFLATION EXPECTATIONS

From 6.9% last month, consumers’ inflation expectations for next year fell to 6.8%. Federal Reserve officials will likely welcome this retreat from the 13-year-high inflation expectations set in November. A two-day policy meeting was held on Tuesday.

In March, the U.S. central banking will likely raise interest rates to control inflation. In spite of high inflation, Americans expect to continue buying homes and cars over the next six-months.

This was the highest six-month period in which the share of people who plan to purchase a vehicle is six months. The intention to buy household appliances such as televisions and refrigerators rose while plans for washing machines and dryers declined.

Over the following six months, consumers were most interested in purchasing a house. This share was the largest for the current series. In November 2010, there was a dip in the series. This suggests that home prices will remain higher this year, as housing supply continues to lag demand.

A second report on Tuesday showed the S&P CoreLogic Case-Shiller’s 20 metropolitan area home price index rose 18.3% on a year-on-year basis in November after accelerating 18.5% in October.

(Graphic: Case Shiller, https://graphics.reuters.com/USA-STOCKS/lgvdwjrjkpo/caseshiller.png)

A third Federal Housing Finance Agency report showing strong house price inflation showed that house prices rose 17.5% over the past 12 months, after increasing 17.4% in October.