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December Sees Continued Decline in Consumer Confidence

December 28 — The Conference Board Consumer Confidence Index decreased in December, following a modest decline in November. The Index now stands at 128.1 (1985 = 100), down from 136.4 last month. The Present Situation Index — based on consumers’ assessment of current business and labor market conditions — declined slightly from 172.7 to 171.6. The Expectations Index — based on consumers’ short-term outlook for income, business and labor market conditions — decreased from 112.3 last month to 99.1 this month.

“Consumer confidence decreased in December, following a moderate decline in November,” said Lynn Franco, senior director of economic indicators at The Conference Board. “Expectations regarding job prospects and business conditions weakened but still suggest that the economy will continue expanding at a solid pace in the short-term. While consumers are ending 2018 on a strong note, back-to-back declines in expectations are reflective of an increasing concern that the pace of economic growth will begin to moderating in the first half of 2019.”

Consumers’ assessment of current conditions declined slightly in December. The percentage of consumers saying business conditions are “good” decreased from 42.0 percent to 37.2 percent, while those claiming business conditions are “bad” increased from 10.7 percent to 11.3 percent. Consumers’ assessment of the labor market was mixed. Those claiming jobs are “plentiful” decreased marginally from 46.8 percent to 46.2 percent, while those claiming jobs are “hard to get” declined from 12.6 percent to 11.6 percent.

Respondents optimism about the short-term future fell in December. The percentage of consumers expecting business conditions will improve over the next 6 months decreased from 21.9 percent to 18.3 percent, while those expecting business conditions will worsen increased, from 8.3 percent to 9.7 percent.

The outlook for the labor market was also less favorable. The proportion expecting more jobs in the months ahead decreased from 22.7 percent to 16.6 percent, while those anticipating fewer jobs increased from 11.2 percent to 14.4 percent. Regarding their short-term income prospects, the percentage of consumers expecting an improvement declined from 23.2 percent to 22.4 percent, while the proportion expecting a decrease rose, from 7.2 percent to 7.7 percent.

The monthly Consumer Confidence Survey, based on a probability-design random sample, is conducted for The Conference Board by Nielsen. The cutoff date for the preliminary results was December 13.

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