According to the Conference Board, consumer confidence, which includes a key indicator on where consumers see the economy going and what they plan to do as a result, is looking up.

Reuters reports:

The Conference Board said its consumer confidence index increased to 108.3 this month, the highest reading since April, from 101.4 in November. Economists polled by Reuters had forecast the index at 101.0. While the survey places more emphasis on the labor market, the rebound in confidence matched a similar rise in the University of Michigan's sentiment index.

Consumers' 12-month inflation expectations fell to 6.7%, the lowest since September 2021, from 7.1% last month. The improvement, which mostly reflected lower gasoline prices, was in line with recent data showing consumer prices increasing moderately in November. It also strengthened views that inflation, though still uncomfortably high, peaked months ago.

This is presumably good news for Joe Biden, whose job approval polling numbers remain in the low 40s, the latest reading of which, from the RealClearPolitics average, is 43.5.

Joe Wiesenthal at Bloomberg Business reports, likely correctly, that falling gasoline prices appeared to have had a lot to do with why confidence levels were up.  He writes:

[H]ere are two things that I'm thinking about at the moment.

1) A lot of the outlooks for next year seem to be of the variety that inflation risk is going to fade, and then it's recession time. And that seems reasonable enough. But the economy is not without its tailwinds. A big one is gasoline prices, which continue to plunge. And we may be seeing the fruits of falling gasoline prices in the consumer sentiment data, which is starting to turn higher.

Here's a chart of the Conference Board Consumer Confidence survey over the last five years. Not only did we get a nice jump (as seen in the white line) it substantially beat the median expectations (the yellow line). In fact the size of the beat was the largest since the middle of 2021 (as seen in the second panel).

Bloomberg chart, by permission.

The decline in gasoline prices is indeed likely a factor — and was brought on by Biden's emptying of the Strategic Petroleum Reserve.

Declining inflation expectations certainly can be derived from falling energy prices, given that so many prices on consumer goods have a chained connection to higher energy prices, but the real actor here wasn't Joe Biden and his gas releases, but the Federal Reserve, which hiked benchmark interest rates seven times this year.  That explains the consumer sentiment toward avoiding big-purchase items, as well as the reluctance of homebuyers to buy houses.  Sales of existing homes plummeted 7.7% on the month in a separate report cited, while on an annualized basis were down a whopping 35.4%.  Housing has nothing to do with oil and everything to do with the prime rate from which mortgages are issued.  The Fed suggests in its statements that it's got a ways to go on the hikes, and will keep hiking.

No credit to Joe Biden on that, either, though he will try to take credit.

One other detail in the report that stands out, a lot to me, is about the jobs market.  Reuters continues:

The survey's so-called labor market differential, derived from data on respondents' views on whether jobs are plentiful or hard to get, increased to 35.8 from 31.5 in November.

This measure correlates to the unemployment rate from the Labor Department and the rise in December was consistent with tight labor market conditions.

Employers have been reluctant to lay off workers after their COVID experience attempting to get workers, which might be why consumer sentiment has gone up on this.

But the other factor not mentioned is that the numbers have been wrong.  According to John Hinderaker, writing at Power Line:

Joe Biden's Bureau of Labor Statistics reported that over a million jobs were created in the second quarter, a heartening statistic that no doubt helped the Democrats in November. But now, the Philadelphia Federal Reserve says that those million jobs were almost entirely fictitious:

The Biden administration vastly overstated its estimate that employers created more than 1 million jobs in the second quarter of this year, claiming historic job growth when in fact hiring had stalled, according to a new estimate.

Job growth was "essentially flat" in the second quarter with only 10,500 jobs added, the Federal Reserve Bank of Philadelphia said.

Could the Bureau of Labor Statistics be a politicized agency, faking numbers to help the Democratic Party? Twenty years ago I wouldn't have believed it, but given what we know about the FBI and the CIA, it is easy to believe that the BLS, which I suspect is staffed overwhelmingly by Democrats, may be corruptible.

It is thought that consumers generally make their estimates about the direction of the economy based on their own "lived experiences," but the fact that bad numbers came out, conveniently for the midterms, and bad by a big margin, suggests that maybe the public believed the phony numbers in the report.

Now that word is out that the Bidenites were just faking it for political purposes, it's hard not to think that that consumer sentiment number could change. 

There are ambiguities in the Consumer Conference report.  It's got some negative expectations embedded into it, particularly in its expectations component, which at 82.4 still forecasts something close to recession.

The fact that the numbers aren't entirely what they seem may be why the direction is not entirely clear.

Joe Biden was happy to fool student debtors ahead of the midterms about his plan to eliminate much of their student debt, and now we learn that jobs created on his watch...weren't created, though they claimed they were.

Combine it with reports of the CPI leaking out early (something that never is supposed to happen) and other reports of Fed officials being accused of insider trading, and it seems the whole economic indicator apparat is starting to get Venezuela-shambly.

The Bidenites will seek to make hay of this report, but as word gets out about the flawed jobs numbers, that may not last.  Consumers don't fool easily, and the shenanigans from this administration are piling up.

Image: By permission from Bloomberg.