Are Americans desensitized to ominous headlines warning of new COVID waves and soaring inflation?
Perhaps, anecdotal data out Wednesday suggested.
“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,” Lynn Franco said, in a press release accompanying the December vintage of The Conference Board’s confidence survey.
At 115.8, the headline print beat estimates (figure below). In fact, it was higher than the most optimistic guess from 49 economists. The range was 105 to 114.6. As a kicker, November’s read was revised up.
Although the present situation gauge ticked lower, the expectations index rose sharply, to 96.9 from 90.2. Note that the present situation index is still very elevated, while expectations are relatively muted.
Notably, buying intentions for homes, cars, household durables and vacations over the next six months rose. I suppose you could argue consumers are bringing forward purchases in anticipation of higher prices, but you could just as easily offer a more benign take.
There was a slight deterioration in consumers’ assessment of their short-term financial prospects, but nothing on par with some of the rather dire visuals one can conjure from the University of Michigan’s data on sentiment.
Franco noted the obvious. “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,” the press release cautioned.
Thankfully, the stocks are fine (figure below).
Now if only 90% of them (the stocks) weren’t concentrated in the hands of 10% of Americans.
In any event, I doubt the utility of breathlessly editorializing around the confidence data. It was incrementally positive. That’s about all one can say.
What I would note, coming full circle, is that “desensitized” is often synonymous with complacency.
