The Conference Board (Board) is reporting that the Consumer Confidence Index (CCI)* declined by 8.1 points in December to 104.7 (1985=100).

Based on consumers’ assessment of the current business and labor market conditions, the Board indicated that its CCI summary’s Present Situation Index fell 1.2 points to 140.2 in December.

Based on consumers’ short-term outlook for income, business and labor market conditions, the Board’s Expectations Index tumbled 12.6 points to 81.1 for the month, just above the threshold of 80 that usually signals a recession ahead. The cutoff date for preliminary results was December 16, 2024.

“The recent rebound in consumer confidence was not sustained in December as the Index dropped back to the middle of the range that has prevailed over the past two years,” said Dana M. Peterson, chief economist at the Board. “While weaker consumer assessments of the present situation and expectations contributed to the decline, the expectations component saw the sharpest drop. Consumer views of current labor market conditions continued to improve, consistent with recent jobs and unemployment data, but their assessment of business conditions weakened. Compared to last month, consumers in December were substantially less optimistic about future business conditions and incomes. Moreover, pessimism about future employment prospects returned after cautious optimism prevailed in October and November.”

“Among age groups, December’s fall in confidence was led by consumers over 35 years old; consumers under 35 became more confident. Among income groups, the decline was concentrated in consumers with household earnings between $25K and $100K, while consumers at the bottom and top of the income range reported only limited changes in confidence. On a six-month moving average basis, consumers aged under 35 and those earning over $100K remained the most confident,” the Board indicated in its summary.

Peterson added: “Consumers became a bit less bullish about the stock market in December: 52.9 percent expected stock prices to increase over the year ahead, down from a record high of 57.2 percent in November. Also, 25 percent of consumers expected stock prices to decline, up from 21.7 percent. The share of consumers expecting higher interest rates over the next 12 months ticked to 48.5 percent but remained near recent lows. The share expecting lower rates eased to 29.3 percent—down from recent months but still quite high.”

The Board reported that the proportion of consumers anticipating a recession over the next 12 months is stable near the series low. Meanwhile, consumers’ assessments of their Family’s Financial Situation—both current and over the next six months—weakened in December. The Board noted that they did not include these measures in calculating the CCI.

The Board reported that the average 12-month inflation expectations stabilized at 5.0 percent in December, the lowest since March 2020. Additionally, references to inflation and prices dominated write-in responses.

Asked what goods and services they expect to be more affordable in 2025, “consumers mostly selected food and gas, with costs for gyms and live events, concerts and sports considered the least likely to be more affordable next year,” the Board noted.

On a six-month moving average basis, purchasing plans for homes were reportedly down slightly in December, potentially reflecting rising mortgage rates despite Fed rate cuts. Purchasing plans for autos continued to increase, and more consumers planned to buy big-ticket items over the next six months. However, the Board suggested that “consumer buying plans for most appliances and electronics were still down on a six-month moving average basis.”

Separately, consumers continued expressing their intentions to purchase additional services ahead, especially dining out and streaming. Traveling and going to the movies was “somewhat lower” on the spending list in December, while personal care and health care “moved up.” Consistent with these findings on travel spending intentions, vacation plans were down for domestic and international travel.

In write-in responses about factors affecting consumers’ views of the economy, mentions of politics, including the outcome of the November elections, continued to rise. Mentions of tariffs also increased in December. Notably, a special question in the December survey showed that 46 percent of U.S. consumers expected tariffs to raise the cost of living, while 21 percent expected tariffs to create more U.S. jobs.

Present Business Situation
Consumers’ assessment of current business conditions eroded somewhat in December.

  • 19.1 percent of consumers said business conditions were “good,” down from 21.6 percent in November.
  • 16.7 percent said business conditions were “bad,” up from 15.3 percent.

Consumers’ appraisal of the labor market improved in December.

  • 37.0 percent said jobs were “plentiful,” up from 33.6 percent in November.
  • 14.8 percent said jobs were “hard to get,” down from 15.2 percent.

Expectations Six Months Hence (Future View)
Consumers were less optimistic about the outlook for business conditions in December.

  • 21.7 percent of consumers expected business conditions to improve, down from 24.7 percent in November.
  • 18.3 percent expected business conditions to worsen, up from 15.9 percent.

Consumers’ assessment of the labor market outlook returned to being pessimistic.

  • 19.1 percent of consumers expected more jobs to be available, down from 22.8 percent in November.
  • 21.3 percent anticipated fewer jobs, up from 17.9 percent.

Consumers’ assessment was less optimistic about their income prospects in December.

  • 17.2 percent of consumers expected their income to increase, down from 20.7 percent in November.
  • 14.3 percent expected their income to decrease, up from 12.1 percent in November.

Assessment of Family Finances and Recession Risk

  • Consumers’ assessments of their family’s financial situation were significantly less favorable in December than last month.
  • Consumers’ assessments of their family’s expected financial situation were less optimistic.
  • The likelihood of a U.S. recession over the next 12 months remained near the series low.

*The monthly Consumer Confidence Survey, based on an online sample, is conducted for The Conference Board by Toluna, a technology company that delivers real-time consumer insights and market research with a panel of over 36 million consumers. The cutoff date for the preliminary results was December 16.

Source: December 2024 Consumer Confidence Survey—The Conference Board

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