(Bloomberg) -- U.S. consumer confidence unexpectedly dropped for the fourth time in five months in December, as expectations for income and job-market conditions edged down.
The Conference Board’s gauge decreased to 126.5 from an upwardly revised November reading, according to data released Tuesday that missed the median projection in a Bloomberg survey of economists. The measure of present conditions rebounded from a five-month low, while economic expectations eased.
Key Insights
- The decline signals Americans remain cautious in a volatile global environment. At the same time, the index remains at elevated levels, propelled by a solid labor market, rising wages for the average worker, and a cooling trade war with China.
- Americans are less optimistic about the future, with drops in expectations for employment and income: the share of those seeing more jobs in the next six months dropped to the lowest level since January and those seeing a decrease in income rose to the highest level since May.
- For current economic conditions, the share of respondents who said jobs were hard to get increased to the highest level since June, while those saying jobs were plentiful also increased.
- Other recent sentiment are more upbeat, with the University of Michigan survey at a seven-month high and Bloomberg’s index of consumer comfort rising to a nine-week high on greater optimism about the economy and personal finances.
“While consumers’ assessment of current conditions improved, their expectations declined, driven primarily by a softening in their short-term outlook regarding jobs and financial prospects,” Lynn Franco, director of economic indicators at the Conference Board, said in a statement. “While the economy hasn’t shown signs of further weakening, there is little to suggest that growth, and in particular consumer spending, will gain momentum in early 2020.”
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- Purchase plans were mixed: The percentage of those planning to buy a car in the next six months increased to a four-month high, with more also saying they’d purchase a home, while appliance buying plans fell to the lowest since February.
- The average inflation rate is projected to be 4.4% in a year, the lowest reading since February.