Today Is Bad, But Tomorrow Will Be Better

Well, consumer confidence ticked higher in January, rising to 89.3 on The Conference Board’s gauge from 87.1 in December.

That was basically in-line with consensus.

Needless to say, the consumer mood remains markedly detached from stocks, or at least that’s the impression one gets from simply plotting the S&P with measures of sentiment. As ever, I readily concede that the figure (below) is a “chart crime,” but I think it serves a purpose. And besides, people like it.

Notably, consumers aren’t particularly enamored with the way things are going right now. The Conference Board’s Present Situation Index fell to 84.4 from 87.2.

It’s hard to blame folks for being a bit glum. After all, jobless claims are running at 900,000, the economy lost a half-million leisure and hospitality jobs last month, the poverty rate rose rapidly in the back-half of 2020 as stimulus benefits rolled off, and a deadly pathogen continues to kill with something like a sense of purpose.

Lynn Franco, Senior Director of Economic Indicators at The Conference Board, called COVID-19 “the major suppressor” of consumer confidence.

On the bright side, expectations are reasonably buoyant considering the circumstances.

“Consumers’ expectations for the economy and jobs, however, advanced further, suggesting that consumers foresee conditions improving in the not-too-distant future,” Franco went on to say.

Meanwhile, home prices rose more than expected. The S&P CoreLogic Case-Shiller 20-City Index jumped 9.08% YoY in November, better than the 8.7% the market was looking for, and another “since 2014” print.

Phoenix, Seattle, and San Diego saw the largest YoY gains among 19 cities surveyed (Detroit was excluded).

In the press release accompanying January’s consumer confidence data, The Conference Board’s Franco casually remarked that “the percent of consumers who said they intend to purchase a home in the next six months improved, suggesting that the pace of home sales should remain robust in early 2021.”

I don’t doubt it, Lynn. I really don’t.