Consumer Confidence Unexpectedly Dips in December
U.S. Consumer Confidence fell to 104.7 in December from 112.8 the previous month, below the consensus estimate of 113.2, as reported by The Conference Board. The November reading was revised from 111.7. The Present Situation Index decreased by 1.2 points to 140.2. The decline in confidence was mostly caused by a drop in expectations from 93.7 to 81.1.
“The recent rebound in consumer confidence was not sustained in December as the Index dropped back to the middle of the range that has prevailed over the past two years,” said Dana M. Peterson, chief economist at The Conference Board. “While weaker consumer assessments of the present situation and expectations contributed to the decline, the expectations component saw the sharpest drop.”
In written survey responses, respondents increasingly referenced politics and tariffs. A specific question revealed that 46% of participants anticipated tariffs would increase the cost of living, whereas 21% believed tariffs would generate additional U.S. job opportunities.
The proportion of respondents anticipating a recession during the next 12 months remained consistent near the series low. Meanwhile, consumers’ evaluations of their family’s financial condition, both present and projected for the next six months, deteriorated.
The labor market, meanwhile, showed signs of improvement in December, with 37.0% of consumers reporting that jobs were “plentiful,” an increase from 33.6% in November, and 14.8% of consumers reporting that jobs were “hard to get,” a decrease from 15.2%.
The average 12-month inflation stabilized at 5.0% in December, the lowest since March 2020.
