CARY, N.C. -

While multiple indicators are showing that consumer confidence is sagging to start 2022, at least one expert doesn’t see the trend as an unconquerable obstacle to vehicle sales.

The Conference Board Consumer Confidence Index declined in January after an increase in December. The Present Situation Index — based on consumers’ assessment of current business and labor market conditions — improved.

Meanwhile, the Expectations Index — based on consumers’ short-term outlook for income, business, and labor market conditions — declined.

“Consumer confidence moderated in January, following gains in the final three months of 2021,” said Lynn Franco, senior director of economic indicators at the Conference Board. “The Present Situation Index improved, suggesting the economy entered the new year on solid footing. However, expectations about short-term growth prospects weakened, pointing to a likely moderation in growth during the first quarter of 2022.

“Nevertheless, the proportion of consumers planning to purchase homes, automobiles, and major appliances over the next six months all increased,” Franco continued in a news release.

The release said that the monthly Consumer Confidence Survey, based on an online sample, is conducted for the Conference Board by Toluna, a technology company that delivers real-time consumer insights and market research through its innovative technology, expertise and panel of over 36 million consumers.

Meanwhile, Cox Automotive chief economist Jonathan Smoke recapped another source of sagging consumer confidence.

In a blog post last week, Smoke noted that the initial January reading on Consumer Sentiment from the University of Michigan declined 2.5% to 68.8 from 70.6 in December.

“Consumers’ views of current conditions and future expectations both declined,” Smoke said. “Consumers saw buying conditions for vehicles decline to the lowest level registered by the survey back to 1978.”

Chief economist Richard Curtin, who oversees the consumer sentiment survey for the University of Michigan, added these perspectives.

“Even among the more optimistic, they are still more likely to anticipate bad rather than good economic times in the year ahead,” Curtin said. “Importantly, confidence in government economic policies is at its lowest level since 2014.

“It will be a difficult task to gauge the appropriate mix of fiscal and monetary policies when such fine-tuning is necessary in an era of large economic and non-economic disruptions. The most crucial and difficult task will be defusing the developing wage-price spiral,” he continued.

While Franco at the Conference Board pointed out the positive expectations for consumers making vehicle purchases, she also conceded these points uncovered by the Conference Board.

“Meanwhile, concerns about inflation declined for the second straight month, but remain elevated after hitting a 13-year high in November 2021. Concerns about the pandemic increased slightly, amid the ongoing Omicron surge,” Franco said.

“Looking ahead, both confidence and consumer spending may continue to be challenged by rising prices and the ongoing pandemic,” she went on to say.

Cox Automotive said that access to auto credit expanded slightly in December, based on the Dealertrack Auto Credit Availability Index for all types of financing, but Smoke also recapped information from the Federal Reserve that might trigger some tightening by finance companies in taking on even more risk caused by higher retail prices for vehicles.

“Auto loan performance deteriorated again in December. With government support fading and loan accommodations falling, credit performance has been normalizing from historically low delinquencies and defaults earlier in the pandemic,” said Smoke, who added that “60-day-plus delinquencies increased in December for the seventh month in a row and were up 4.4% from a year ago.

“In December, 1.45% of auto loans were severely delinquent, which was an increase from 1.36% in November and the highest severe delinquency rate since May 2020. Compared to a year ago, the severe delinquency rate was 5 basis points higher,” Smoke continued. “In December, 5.48% of subprime loans were severely delinquent, which was an increase from 5.17% in November and the highest severe delinquency rate since February 2020. The subprime severe delinquency rate was 45 basis points higher from a year ago. Loan defaults declined 0.7% in December from November but were up 6.3% from a year ago.”