Consumer Confidence Slows, ‘Unlikely to Gain Momentum’ in Early 2020
The Conference Board, New York, said its Consumer Confidence Index fell marginally in December, following a slight increase in November. The Index now stands at 126.5, down from an upwardly revised 126.8 in November.
The Present Situation Index – based on consumers’ assessment of current business and labor market conditions – increased from 166.6 to 170.0. The Expectations Index – based on consumers’ short-term outlook for income, business and labor market conditions – decreased from 100.3 last month to 97.4 this month.
“While consumers’ assessment of current conditions improved, their expectations declined, driven primarily by a softening in their short-term outlook regarding jobs and financial prospects,” said Lynn Franco, Director of Economic Indicators with The Conference Board. “While the economy hasn’t shown signs of further weakening, there is little to suggest that growth, and in particular consumer spending, will gain momentum in early 2020.”
Sarah House, Senior Economist with Wells Fargo Securities, Charlotte, N.C., noted “positive developments since the survey suggest some near-term upside, while the high level remains supportive of consumer spending.”
The report said consumers’ appraisal of current-day conditions improved in December. Those claiming business conditions are “good” was virtually unchanged at 38.7 percent, while those claiming business conditions are “bad” decreased from 13.6 percent to 11.1 percent. Consumers’ assessment of the job market was mixed. Those saying jobs are “plentiful” increased from 44.0 percent to 47.0 percent, however, those claiming jobs are “hard to get” also increased, from 12.4 percent to 13.1 percent.
Consumers were moderately less upbeat about the short-term outlook. The percentage of consumers expecting business conditions will improve over the next six months increased slightly from 18.6 percent to 18.9 percent, while those expecting business conditions will worsen declined from 11.4 percent to 9.3 percent.
Consumers’ outlook for the labor market was mixed. The proportion expecting more jobs in the months ahead decreased from 16.5 percent to 15.3 percent, while those anticipating fewer jobs increased from 13.4 percent to 14.9 percent. Regarding their short-term income prospects, the percentage of consumers expecting an improvement declined from 22.9 percent to 21.1 percent, while the proportion expecting a decrease rose from 6.2 percent to 7.7 percent.