The Conference Board Consumer Confidence Index rose for the third consecutive month in January to its highest level since December 2021. The index now stands at a reading of 114.8 (1985=100), up from a revised reading of 108.0 in December 2023.

“January’s increase in consumer confidence likely reflected slower inflation, anticipation of lower interest rates ahead and generally favorable employment conditions as companies continue to hoard labor,” Dana Peterson, chief economist at The Conference Board, said in a press statement. “The gain was seen across all age groups but was largest for consumers 55 and over. Likewise, confidence improved for all income groups except the very top; only households earning $125,000+ saw a slight dip.”

The Present Situation Index — based on consumers’ assessment of current business and labor market conditions — rose to a reading of 161.3 (1985=100) in January from 147.2 in December.

The Expectations Index — based on consumers’ short-term outlook for income, business, and labor market conditions — rose to 83.8 (1985=100) in January, up from a revised reading of 81.9.

Peterson noted that January’s write-in responses revealed that consumers remain concerned about rising prices, although inflation expectations fell to a three-year low.

“Buying plans dipped in January, but consumers continued to rate their income and personal finances favorably currently and over the next six months,” Peterson said. “Consumers’ perceived likelihood of a US recession over the next 12 months continued to gradually ease in January, consistent with an Expectations Index rising above 80.”

Consumers’ appraisal of the labor market was more positive in January, as 45.5% of consumers said jobs were plentiful, up from 40.4% in December. In addition, 9.8% of consumers said jobs were hard to get, down from 13.1%.

Also, consumers’ assessment of the short-term labor market outlook was slightly less pessimistic in January. While 16.0% of consumers expect more jobs to be available, down from 17.6% in December, 15.3% anticipate fewer jobs, down from 18.4%.