December’s Consumer Confidence Hits Lowest Point Since April U.S. Tariffs

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December’s Consumer Confidence Hits Lowest Point Since April U.S. Tariffs

Consumer confidence in the United States has significantly declined in December, reflecting growing concerns about high prices and the ongoing impact of U.S. tariffs. According to the Conference Board, the consumer confidence index fell by 3.8 points to 89.1, down from November’s revised figure of 92.9.

Consumer Confidence Index Trends

This decrease brings the index close to the 85.7 mark recorded in April, coinciding with the implementation of tariffs on U.S. trading partners. Notably, 26.7% of consumers described jobs as “plentiful,” a drop from 28.2% in November. Conversely, 20.8% reported that jobs were “hard to get,” up from 20.1% the previous month.

Short-Term Economic Expectations

While short-term expectations regarding income, business conditions, and job availability remained stable at 70.7, this figure is still well below the 80 threshold that could indicate an approaching recession. This marks the 11th consecutive month that the index has remained under 80.

Consumers’ current economic assessments dropped significantly, falling by 9.5 points to 116.8.

Inflation and prices emerged as consumers’ primary concerns, alongside the impact of tariffs on the economy.

Labor Market Insights

Experts have reported mixed signals regarding the economy. In November, the U.S. added 64,000 jobs, but there was a loss of 105,000 jobs in October. The unemployment rate has risen to 4.6%, the highest level since 2021. Economists highlight that the labor market is currently experiencing low hiring and low firing rates. This stagnation is attributed to uncertainties surrounding tariffs and the prolonged effects of high interest rates.

Job Creation Trends

The average job creation rate has dwindled to 35,000 per month since March, in stark contrast to the average of 71,000 during the preceding year. Federal Reserve Chair Jerome Powell has indicated that he expects these figures may be revised downward in the near future.

The ongoing economic landscape presents challenges that require close monitoring, particularly as consumer sentiment continues to fluctuate amid tariffs and inflationary pressures.