US consumer confidence lags as 2023 gets under way

American consumers are kicking off 2023 a bit less confident than they were at the end of last year as inflation and the possibility of a recession loom.

The Conference Board reported Tuesday that its consumer confidence index slipped to a still-optimistic 107.1 in January, down from 109 in December. Last month's reading was the highest the index has reached since April.

The business research group’s present situation index — which measures consumers’ assessment of current business and labor market conditions — rose to 150.9 from 147.4. Respondents continue to express optimism about the stability of their incomes and the broader U.S. job market, which has held up well even as the Federal Reserve has tried to cool the economy and with a succession of “jumbo” rate increases.

The board’s expectations index — a measure of consumers’ six-month outlook for income, business and labor conditions — deteriorated to 77.8 in January from 83.4 in December. A reading under 80 often signals a recession in the coming year, the Conference Board said.

The conference board said consumers' intention to buy big-ticket items like cars held steady, but plans to purchase homes fell even further with higher interest rates and home prices.

Getting a read on consumers’ view of the economy lately has been as uneven as the economy itself.

Earlier this month, the government reported that Americans cut back on spending in December for the second straight month as inflation and the rising cost of using credit cards slowed consumer activity over the crucial holiday shopping season. Retail sales fell a worse-than-expected 1.1% in December, following a revised 1% drop in November, the Commerce Department reported.

Solid hiring, rising pay, and savings beefed up by government financial support during...