American consumers’ confidence has declined as of December, according to a report from a business research organization.
The Conference Board announced on Monday that its consumer confidence index dipped to 104.7 in December, down from 112.8 in November. Analysts had anticipated an increase, predicting a reading of 113.8. This drop follows a period where consumer sentiment had been on the rise, with individuals spending more as they prepared for the crucial holiday shopping period.
The consumer confidence index evaluates two main components: the perception of current economic conditions among Americans and their expectations for the economy over the next six months.
In particular, the outlook regarding short-term expectations for factors like income, business conditions, and the job market fell significantly, dropping over a dozen points to a reading of 81.1. The Conference Board indicated that scores below 80 could hint at an impending recession.
The percentage of consumers who anticipate a recession in the upcoming year held steady, showing no significant changes.
Additionally, the report indicated that consumers’ evaluations of current economic conditions slightly decreased by a little over a point, yielding a reading of 140.2.
In contrast, consumer spending at retail outlets saw an uptick last month, contributing to a 0.7% increase in retail sales for November.
Another analysis revealed that consumer spending rose solidly by 0.4% from October to November, reflecting that households continue to drive economic activity. The U.S. economy recorded a robust 3.1% annual growth rate in the last quarter, primarily fueled by consumer demand.
It is important to note that consumer spending constitutes nearly 70% of the total U.S. economic activity, making it a vital indicator closely monitored by economists as they assess the current mood of American consumers.
