The US consumer confidence reading will be released Dec 21st. The Consumer confidence index known as the CCI is a survey administered by the conference board. The board measures how optimistic or pessimistic is the population regarding the current economic situation. The CCI readings forecasts that when the population is optimistic, they will spend more in contrary, if pessimistic their spending pattern would lead to economic contraction as they will be heading towards saving more than spending. Opinions about current conditions contributes 40% of the index while projections for future conditions make up the remaining 60%.
Proceeding the Covid pandemic, the index reached a high of 128.9 in June 2021 and since then its momentum is taking a downward direction of which it reached its lowest of 95.3 in July 2022. As stated by the US conference board, consumer confidence in November demonstrated pessimism about the short-term business conditions, short term labor market and income prospects.
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The index is currently reading 100.2 down from 102 with an optimistic forecast of 101 in December. The US ISM purchasing managers index is trending downward since its post pandemic high of 64 in March 2021, November reading is 49 versus 50.2 in October.
Observing few key variables that would support predictions regarding December’s positive consumer confidence forecast, the unemployment rate is at a steady pace since March 2022 going up to 3.7 in November from September’s 3.5 bottom which reflects ion the non-farm payrolls which has been falling below 714k since February 2022. Adding to that, although consumer spendings is at its highest levels the curve is flattening accompanied with a down trending wage growth curve that is gaining momentum and is affected by spiking inflation since March 2021 and a hawkish federal reserve policy at which the current rate is 4.5%.
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