Consumer Confidence fell short of expectations in December, largely due to how Americans are viewing the economic outlook in the year ahead.
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.
Overall, the Consumer Confidence index reading for December was 104.7, below the 113.2 expected by economists surveyed by Bloomberg.
“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 the 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.
Markets, which have recently been in a slump amid rising concerns about the uncertainty surrounding policies from the Trump administration and the Federal Reserve in 2025, moved lower after the release.
All three major indexes quickly hit their lows of the session before beginning to pare losses.