So consumer confidence is up? But with the jobs numbers fudged, it's hard to think that will last

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.

Which 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:

... here 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).

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 towards avoiding big purchase items, as well as the reluctance of home buyers 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.

It’s ALL about the price of gas. which is based on the price of oil, which is the biggest driver of inflation, not the price of groceries, which are properly not used in inflation calculations because they jump around too much.

But people fixate on grocery prices and ignore the prices of thousands of other products. This leads them to overestimate inflation.

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