Fifth Straight Monthly Decline Signals Deepening Economic Anxiety

The Conference Board's Consumer Confidence Index fell to 89.1 in December, marking the fifth consecutive monthly decline and missing economist expectations of 91.0. The reading represents a significant drop from November's revised 92.9, suggesting American households are growing increasingly pessimistic about economic conditions despite temporary relief from the federal government shutdown resolution.

Present Situation Index Records Sharpest Drop in Over a Year

The Present Situation Index plummeted 9.5 points to 116.8, reflecting consumers' deteriorating assessment of current economic conditions. For the first time since September 2024, more consumers now view business conditions as "bad" (19.1%) than "good" (18.7%). The labor market assessment also weakened, with those saying jobs are "plentiful" falling to 26.7% while those saying jobs are "hard to get" rose to 20.8%.

Recession Warning Signal Persists for 11th Consecutive Month

The Expectations Index held steady at 70.7, remaining below the critical 80.0 threshold that historically signals an impending recession. This marks the 11th straight month the indicator has flashed warning signals. While future business condition expectations improved slightly, concerns about employment and income intensified.

  • 27.4% of consumers expect fewer jobs to be available in coming months
  • 14.7% anticipate decreased income versus 18.4% expecting increases
  • Four of five index components declined in December

Broad-Based Decline Across Demographic Groups

The confidence drop affected nearly all demographic segments. Confidence fell across all age groups except the Silent Generation, though Millennials and Gen Z remained relatively optimistic. The decline spanned income brackets with only the lowest (under $15K) and highest (over $125K) earners showing stability. Notably, confidence continued to fall among Democrats, Republicans, and Independents alike.

"Despite an upward revision in November related to the end of the shutdown, consumer confidence fell again in December and remained well below this year's January peak," said Dana M. Peterson, Chief Economist at The Conference Board. "Four of five components of the overall index fell, while one was at a level signaling notable weakness."