US Consumer Confidence Rises, Inflation Still a Worry

Economic Sentiment and Consumer Confidence - Consumer confidence is showing slight improvement, with inflation expectations decreasing compared to previous readings [1][2] - Although overall sentiment has increased, it remains at historically low levels [2] - Consumers are feeling some relief regarding inflation but are still cautious about the economy [3] Spending Behavior and Economic Conditions - Historically, consumer confidence correlates with spending; when confidence is low, spending tends to decrease [5] - In 2022, despite low confidence, consumers were willing to spend due to strong labor markets and income stability [5] - Currently, consumers report weakening labor markets, leading to less willingness to spend, particularly among middle and lower-income groups [6][8] Income Distribution and Spending Patterns - High-income consumers with stable incomes and significant stock portfolios are more likely to continue spending [8] - Consumers with smaller portfolios or job insecurity are more cautious and focused on value when making spending decisions [8] - The distribution of income and wealth is highly skewed, with high-income individuals contributing significantly to aggregate spending [9][10]