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<h2>Consumer Confidence rebounds, but at what cost?</h2>
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<p>Consumer Confidence from the Conference Board increased for the fifth consecutive month as pandemic woes continued to fade.&nbsp; This month’s report showed broad strength, with both the Present Situation and Future Expectations components climbing higher.&nbsp; Gains in the Present Situation component were driven by more favorable views of the labor market.&nbsp; In fact, over 54% of consumers view jobs as “plentiful” versus only 11% who see them as “hard to get”, one of the widest differentials on record.&nbsp;</p>
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<p>While this bodes well for consumer spending in the months ahead, it highlights that there is a shortage of labor that could lead to persistent wage inflation.&nbsp; According to the Conference Board’s survey, concerns about inflation are already present as consumers’ inflation expectations have surged to a 10-year high.&nbsp; This will be a key development to watch going forward, as the longer that inflation expectations remain elevated, the greater the risk of inflationary psychology taking hold.</p>
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