U.S. consumer confidence suffered a surprise slump in December, according to The Conference Board's Consumer Research Center, as weak job prospects soured spirits, compounding the gloomy picture for retailers in the key holiday shopping season.
The Consumer Confidence Index dropped to 80.3 in December from a revised 84.9 in November, according to the Conference Board. That was far below analysts' forecasts for an improvement to 85.5.
The index has declined for six of the past seven months, and the decline in December took the index back near the nine-year low of 79.6 set in October.
“The major factor dampening consumers' spirits has been the rising unemployment rate and the discouraging job outlook,” said Lynn Franco, director of the Conference Board's Consumer Research Center. “Weak retail sales over the holidays clearly reflect the current mood of consumers. Until there is an improvement in labor market conditions, there is not likely to be a significant upturn in confidence.”
Another one of The Conference Board's research measures, the Present Situation Index (a measure of consumers' current attitudes about the economy and their finances), plunged to 69.9 in December from an upwardly revised 78.3 in November. It was the lowest level for the index since January 1994, when it was at 67.6. But the Expectations Index, a gauge of consumers' six-month outlook, did not fare as badly, slipping to 87.2 from 89.3 the previous month.
“That is the silver lining, and it raises no fears of a double-dip recession,” said Franco. “These are some of the patterns you see in a recovery.”