Source: Economics Group of Wells Fargo Bank, N.A.
Summary
Today’s two-year high for consumer confidence and new post-pandemic high for expectations corroborates an improved consumer mindset captured in other measures such as this month’s consumer sentiment survey. Expectations for rates and inflation are down, while job prospects are up.Mr. Mojo Risin’
If you need convincing that consumers are regaining some lost swagger, today’s report showed consumer confidence jumped to a two-year high of 114.8 in January, corroborating this month’s surge in consumer sentiment (chart).
It will not be lost on FOMC policymakers that consumer expectations for interest rates to rise in the year ahead plummeted to just 41.5 percent, the lowest share since 2020. Policymakers have repeatedly cited consumer inflation expectations as a factor to be considered in the context of policy decisions. In that regard, they might be encouraged to see that average 12-month inflation expectations fell to 5.2 percent, the lowest since March 2020.