Despite high inflation and rising interest rates, confidence among U.S. consumers is on the mend.
According to a report from The Conference Board, its consumer confidence index rose to 108.3 for the month of December. That's a jump from November's index of 101.4 and the highest level in months.
"Consumer confidence bounced back in December, reversing consecutive declines in October and November to reach its highest level since April 2022," Lynn Franco, Senior Director of Economic Indicators at The Conference Board, said in a statement.
The Present Situation Index -- based on consumers' assessment of current business and labor market conditions -- increased to 147.2 from 138.3 last month. According to the report, 19% of consumers said business conditions were "good," up from 17.8% last month. Another 47.8% said jobs were "plentiful," up from 45.2% last month, while just 12% said jobs were "hard to get," down from 13.7% last month.
According to Franco, a decrease in gas prices was a big factor in consumer attitudes becoming more positive.
"Inflation expectations retreated in December to their lowest level since September 2021, with recent declines in gas prices a major impetus," she said.
The Expectations Index -- based on consumers' short-term outlook for income, business, and labor market conditions -- improved to 82.4 from 76.7. Despite the improvement, levels are still lingering around 80 -- a ranking associated with recession.
Although consumers are feeling more optimistic about the economy, the report shows a decline in those saying they would be looking to purchase homes and big-ticket appliances.
"Vacation intentions improved but plans to purchase homes and big-ticket appliances cooled further," Franco said. "This shift in consumers' preference from big-ticket items to services will continue in 2023, as will headwinds from inflation and interest rate hikes."
