US consumer confidence worsened in early January, falling to the second lowest level in a decade, amid concerns about accelerating inflation and doubts about the ability of the government’s economic policies to fix it.
The University of Michigan said its preliminary index of consumer confidence fell to 68.8 points in the first half of the month from a final reading of 70.6 in December.
The lowest-income households have a more negative outlook than the better-off, with a 9.4% drop among households with total incomes below $100,000, but a 5.7% rise among those above that threshold.
The deeper-than-expected drop in confidence comes at a time when Americans are facing headwinds despite the overall strength of the economy, with inflation topping the list of concerns amid a record level of cases. of Covid-19 due to the Omicron variant which, in turn, could prolong high prices.
“While the Delta and Omicron variants undoubtedly contributed to this downward shift, the decline was also due to a rising rate of inflation,” said Richard Curtin, director of the survey, in a statement.
“In early January, three-quarters of consumers rated inflation, compared to unemployment, as the most serious problem facing the nation,” he added.
At a current annual rate of 7.0%, inflation is near its highest level in 40 years, outpacing wage gains.
Current inflation readings have reinforced expectations that the Federal Reserve will start raising interest rates in March. The Joe Biden administration has said it is also prioritizing ways to help curb inflation. The survey showed that confidence in the government’s economic policies is at its lowest level since 2014.
Manufacturing production falls in December
In other key economic data, output at US factories unexpectedly fell in December, pressured by a slowdown in activity at motor vehicle plants amid a global shortage of semiconductors.
Manufacturing output fell 0.3% last month after rising 0.6% in November, the Federal Reserve said on Friday. Economists polled by Reuters had forecast a rise of 0.5 percent. Production increased 3.5% compared to December 2020.
Manufacturing, which represents 11.9% of the country’s economy, continues to be supported by reduced inventories at businesses, as demand for goods remains strong. But Covid-19 and the recovery from the pandemic have overwhelmed supply chains, causing inflation.
Manufacturing output increased at an annualized rate of 4.9% in the fourth quarter, after rising at a 4.0% pace in the July-September quarter.
Production at auto plants fell 1.3% last month after rising 1.7% in November. Motor vehicle manufacturing is about 6% below its level a year earlier.
Last month’s drop in manufacturing output combined with a 1.5% drop in utilities pushed industrial production down 0.1%. That followed a 0.7% advance in November. Utilities were affected by unusually hot weather in December, reducing demand for heating.
The production registered in the mining sector increased 2.0 percent.
They added 887,000 million dollars
Christmas left record sales in the United States
Christmas sales in the United States hit a record $886.7 billion in 2021, according to data from a trade body on Friday.
People rushed to buy gifts online and in stores amid a surge in Covid-19 cases and supply chain problems that threatened to jeopardize the crucial shopping season.
The National Retail Federation said holiday sales, including e-commerce, rose 14.1% during November and December, marking the strongest growth in at least two decades and beating its latest forecast for a rise of as much as 11.5%.
The shopping season was marked by shipping delays caused by the pandemic and resulting product shortages. To guarantee supply, some retailers such as Walmart and Target redirected goods to less congested ports.