American consumers are kicking off 2023 a bit less confident than they were at the end of last year as inflation and the possibility of a recession loom.

The Conference Board reported Tuesday that its consumer confidence index slipped to a still-optimistic 107.1 in January, down from 109 in December. Last month’s reading was the highest the index has reached since April.

The business research group’s present situation index — which measures consumers’ assessment of current business and labor market conditions — rose to 150.9 from 147.4. Respondents continue to express optimism about the stability of their incomes and the broader U.S. job market, which has held up well even as the Federal Reserve has tried to cool the economy and with a succession of “jumbo” rate increases.

The board’s expectations index — a measure of consumers’ six-month outlook for income, business and labor conditions — deteriorated to 77.8 in January from 83.4 in December. A reading under 80 often signals a recession in the coming year, the Conference Board said.

The conference board said consumers’ intention to buy big-ticket items like cars held steady, but plans to purchase homes fell even further with higher interest rates and home prices.

Getting a read on consumers’ view of the economy lately has been as uneven as the economy itself.

Earlier this month, the government reported that Americans cut back on spending in December for the second straight month as inflation and the rising cost of using credit cards slowed consumer activity over the crucial holiday shopping season. Retail sales fell a worse-than-expected 1.1% in December, following a revised 1% drop in November, the Commerce Department reported.

Solid hiring, rising pay, and savings beefed up by government financial support during the pandemic enabled most Americans to keep up with rising prices. That government assistance has long ended, however, and some Americans have dipped into savings accounts since then. Credit card defaults are on the rise with some households slow to adjust their spending to a new reality.

Still, the job market is still a pillar of strength in the U.S. economy and wages continue to rise, creating a conflict for the Fed which needs to cool spending and hiring to control inflation.

Inflation does appear to be in retreat, falling for the sixth straight month, to 6.5% in December.

The willingness to buy a home has faded with mortgage rates that are nearly doubled what they were a year ago. The National Association of Realtors reported earlier this month that sales of previously occupied U.S. homes declined for the 11th straight month in December and 2022 sales declined nearly 18% from 2021. That’s the weakest year for home sales since 2014 and the biggest annual decline since 2008, during the housing crisis of the late 2000s.