The Economy

U.S. Consumer Confidence Slumps in December

The Conference Board's latest survey shows an unexpectedly large dip in confidence last month, reflecting concerns over the pace of economic growth.
Matthew HellerDecember 27, 2018
U.S. Consumer Confidence Slumps in December

Consumer confidence in the United States fell for a second straight month in December, reflecting concerns over the pace of economic growth, the Conference Board said Thursday.

According to the Conference Board’s latest monthly survey, its consumer confidence index slumped to 128.1 in December from a revised 136.4 in November. Economists expected the index to decline to 134.0 from the 135.7 originally reported for the previous month.

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The index fell in November after rising to 137.9 in October, the highest level since 2000.

The Conference Board’s expectations index, which is based on consumers’ short-term outlook for income, business, and labor market conditions, also decreased from 112.3 last month to 99.1 in December.

“While consumers are ending 2018 on a strong note, back-to-back declines in expectations are reflective of an increasing concern that the pace of economic growth will begin moderating in the first half of 2019,” Lynn Franco, senior director of economic indicators at the Conference Board, said in a news release.

The Wall Street Journal said even though consumer confidence remains “historically strong,” the Conference Board survey suggests consumers “were spooked by the recent rout in global equity markets, weak housing data, and the continuing concerns about the Trump administration’s trade actions this year.”

Consumer concerns about economic growth, the Journal noted, are in line with economists’ expectations as “fiscal stimulus from the late-2017 tax cuts fade, and the Federal Reserve continues to tighten monetary policy.”

In raising interest rates again earlier this month, the Fed revised its 2019 forecast for GDP down to a 2.3% annual growth rate from 2.5%.

The Conference Board also found 18.3% of survey respondents expected business conditions to improve over the next six months, compared to 21.9% in November, while those expecting conditions will worsen rose to 9.7% from 8.3%. Small-business optimism fell for the third month in a row.

Revised data released by the University of Michigan last week unexpectedly showed an improvement in U.S. consumer sentiment in December.
Image: Getty