U.S. Consumer Confidence Sees Significant Decline in December 2024
Consumer confidence in the United States experienced a significant drop in December 2024. The Conference Board reported that the Consumer Confidence Index fell by 8.1 points to 104.7, down from 112.8 in November.
This decline reflects consumer concerns about current economic conditions and future prospects. The Present Situation Index, which evaluates consumer views on current business and labor market conditions, dropped by 1.2 points to 140.2. Meanwhile, the Expectations Index, which gauges consumer outlook on income, business, and labor market conditions in the short term, plummeted by 12.6 points to 81.1. This figure is near the threshold of 80, often signaling a potential recession.
According to Dana M. Peterson, Chief Economist at The Conference Board, "The return of concerns about the future caused consumer confidence to decline in December, bringing the index back to the mid-range levels seen over the past two years."
Previously, in October and November 2024, consumer confidence showed improvement. In October, the index rose to 108.7 from 99.2 in September, marking the largest monthly increase since March 2021. Then, in November, the index climbed again to 111.7, driven by consumer optimism regarding job prospects and reduced inflation expectations.
However, the December decline indicates that concerns about economic conditions and the labor market continue to weigh on consumer sentiment. This development is crucial to monitor, as consumer confidence serves as a leading indicator that can impact consumer spending and, ultimately, overall economic growth.