American Consumer Confidence Declines in December

As 2024 comes to a close, American consumers are expressing less confidence in the economy, according to a recent report from a leading business research group. The Conference Board announced on Monday that its consumer confidence index decreased significantly in December, dropping to 104.7 from 112.8 in November. Analysts had expected a rise in confidence, predicting a reading of 113.8, but the actual results indicate a different trend.

The consumer confidence index serves as an important gauge, reflecting Americans' views on current economic conditions as well as their expectations for the near future. In this latest report, the short-term outlook for income, business, and the job market saw a notable plunge, falling more than a dozen points to a reading of 81.1. The Conference Board indicated that a score below 80 could suggest the possibility of a recession on the horizon.

Despite the decline in confidence, the percentage of consumers anticipating a recession within the next year remained fairly stable. Additionally, consumer perceptions of current conditions dipped slightly, recording a value of 140.2.

In contrast to these diminishing confidence levels, consumers increased their retail spending in November, contributing to a 0.7% rise in retail sales for that month. Another report indicated solid spending growth of 0.4% from October to November, suggesting that American households are still driving economic activity. During the last quarter, the U.S. economy experienced robust growth at an annual rate of 3.1%, with consumer demand playing a pivotal role.

Given that consumer spending constitutes nearly 70% of the total economic activity in the United States, economists closely monitor these trends for insights into consumer sentiment. As consumer confidence wavers, it remains to be seen how this will impact spending behavior and the overall economy in the coming months.

consumer, confidence, economy