US consumer confidence tumbled in December from the previous month amid Americans’ growing uncertainty over the economic outlook in the year ahead.
The Conference Board’s consumer confidence index declined by 8.1 points in December to 104.7, below the 113.2 expected by economists surveyed by Bloomberg.
The expectations index, which includes the short-term outlook for income, business, and labor market conditions, sank 12.6 points to 81.1 in December, its largest-month-over-month decline since November 2020. That was just slightly higher than the threshold of 80 that usually signals a recession ahead.
Stocks hit session lows after the Conference’s Board’s release and then pared losses.
“Consumer views of current labor market conditions continued to improve, consistent with recent jobs and unemployment data, but their assessment of business conditions weakened,” Conference Board chief economist Dana Peterson said in a press release. “Compared to last month, consumers in December were substantially less optimistic about future business conditions and incomes. Moreover, pessimism about future employment prospects returned after cautious optimism prevailed in October and November.”
In December, 21.3% of respondents anticipated fewer jobs to be available in the next six months, up from 17.9% the month prior. Meanwhile, expectations for income decreases and worse business conditions in the next six months, also moved higher.
The potential impact of President-elect Donald Trump’s policies remained top of mind for consumers in December, per the Conference Board. Mentions of “politics” and “tariffs” both increased in December.
According to the data, “46% of US consumers expected tariffs to raise the cost of living while 21% expected tariffs to create more US jobs.”
Also in Monday’s release: the percent of consumers expecting higher stock prices in the next year fell to 52.9% from a record high of 57.2% seen in November.
The survey period ended on Dec. 16, meaning consumers submitted their responses prior to last Wednesday’s Federal Reserve meeting. But the tone of the December survey from the Conference Board fell in line with uncertainty highlighted by Fed Chair Jerome Powell that rattled markets last week.
Markets sold off the day the meeting concluded when Powell explained why the central bank is expecting to cut interest rates at a slower pace than it had previously expected. Powell used some version of the word “uncertain” the greatest number of times seen in a Fed press conference in 2024. He said there was higher uncertainty about inflation. He didn’t outright decline the possibility of an interest rate hike next year. And he even admitted that some officials have started accounting for “policy uncertainty” from the Trump administration in their forecasts.