Confidence among U.S. consumers slumped in December, driven by growing pessimism about future economic and labor market conditions, according to a Dec. 23 report from The Conference Board, reflecting a pullback in optimism that surged in the immediate wake of the 2024 presidential election.
The group’s headline consumer confidence index fell 8.1 points to 104.7 in December, erasing gains made in November, with the decline most concentrated in middle-income households.
The present situation index, which assesses consumers’ views on a mix of current business and labor conditions, edged down slightly to 140.2. The decline was driven mostly by a deterioration in appraisals of the current business situation in the United States, with 16.7 percent saying business conditions were “bad,” up from 15.3 percent who expressed that view in November.
Labor market optimism, a key driver of consumer spending, showed mixed signals. There was improvement in assessments of current labor market conditions, but deterioration in the six-month-ahead outlook.
The Conference Board’s forward-looking expectations index, which reflects the business, income, and labor market outlook over the next six months, plunged 12.6 points to 81.1 in December, hovering just above the 80-point threshold that often signals an incoming recession. The decline marked the largest drop in over four years. […]
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