The latest release of Consumer Confidence sent an ominous message for the U.S. economy as consumer attitudes crumbled. Heading into year-end, consumers expressed mounting concerns about the labor market and income prospects. The overall Consumer Confidence Index fell by 3.8 points in December to 89.1 while the Future Expectations Index was unchanged at 70.7. The Future Expectations Index continues to sit below the Conference Board’s recession warning level of 80 and has now been below this critical threshold for 11 consecutive months.
Even more concerning, the Present Situation Index plunged 9.5 points to 116.8 – the lowest level in nearly 5 years. While Consumer Future Expectations have been dragging for some time, consumer attitudes and spending have been propped up by positivity regarding their current situation. However, now that consumers are feeling down about both the present and future, the probability that they will begin to tighten their belts rises considerably. With Consumer Spending accounting for approximately 70% of GDP, faltering Consumer Confidence could spell trouble for the broader economy in 2026.
