U.S. consumer confidence continues to rebound in January, index rises to 131.6

The U.S. consumer confidence rebounded in the month of January. The Conference Board’s consumer confidence index rose to 131.6 from 128.2, rising for the second straight month of rebound. The January’s figure came in above consensus expectations of 128 and was predominantly because of a widespread rebound in the present situations and expectations indices.

Last year, the consumer confidence index was quite volatile, impacted by spikes in tariff-related uncertainty at several points in time. Nevertheless, the signing of the U.S-China Phase-1 agreement at the turn of this year is expected to ease trade-related worries and underpin consumer confidence, noted Barclays in a research report. Moreover, solid labr market conditions continue to anchor confidence.

Delving into details, the present situations index rose to 175.3 from 170.5, the highest since August 2019. This was led by positive assessments of the employment situation, with a higher share of respondents viewing jobs as “plentiful”. Meanwhile, assessments of present business conditions rebounded a bit.

Households were also more positive about the short-term outlook, with the expectations index rising to 102.5 from 100. This rebound was mainly due to optimism over employment conditions six months ahead. Income expectations remained largely stable, as did consumers’ outlook on business conditions.

“In all, we view consumer confidence as supportive of consumption spending in the coming months”, added Barclays.