Inflation, trade and politics contribute to concerns
December 24, 2025
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Consumer confidence slid again in December, with The Conference Boards Consumer Confidence Index falling 3.8 points to 89.1, reflecting renewed unease despite an upward revision to Novembers reading after the federal government shutdown ended.
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Views of current conditions deteriorated sharply, as the Present Situation Index plunged 9.5 points to 116.8, marking the first negative net assessment of business conditions since late 2024.
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Recession worries persist, with the Expectations Index holding at 70.7below the key recession-warning threshold of 80 for the 11th straight montheven as some outlooks for inflation, stocks, and family finances showed tentative improvement.
U.S. consumers ended the year feeling less confident about the economy, according to the latest Consumer Confidence Survey from The Conference Board. The headline Consumer Confidence Index dropped to 89.1 in December from a revised 92.9 in November, remaining well below its peak earlier in the year.
The decline came even after Novembers index was revised higher, reflecting more optimistic responses collected after the federal government shutdown ended in mid-November. Still, Decembers pullback underscored lingering anxiety, particularly about present-day economic conditions.
The Present Situation Index, which gauges consumers views of current business and labor market conditions, suffered the steepest setback. It fell 9.5 points to 116.8, as assessments of business conditions turned negative on net for the first time since September 2024a period marked by labor market turmoil and severe weather events.
Doubts about the job market
Labor market perceptions also weakened. Fewer consumers described jobs as plentiful, while a slightly higher share said jobs were hard to get, continuing a trend of softening confidence in employment conditions.
Expectations about the future were mixed. The Expectations Index, which measures consumers outlook for income, business, and labor market conditions over the next six months, held steady at 70.7. That level remains below 80, a threshold that historically signals recession risk ahead.
Two of the three expectations components dipped in December, with gloomier views on the labor market and household income prospects offsetting a partial rebound in expectations for future business conditions.
Despite an upward revision in November related to the end of the shutdown, consumer confidence fell again in December and remained well below this years January peak, said Dana Peterson, chief economist at The Conference Board. Four of five components of the overall index fell, while one was at a level signaling notable weakness.
Broad-based softness
Demographic data showed broad-based softness. On a six-month moving average, confidence declined across all age groups, though consumers under 35 remained more upbeat than older cohorts. Millennials and Gen Z continued to rank as the most optimistic generations, while the Silent Generation was the only group to show a modest improvement.
By income, confidence fell in nearly every bracket except households earning under $15,000 and those earning more than $125,000, though the lowest-income group remained the least optimistic overall. Confidence also slipped among Democrats, Republicans, and Independents alike.
Write-in responses revealed what was weighing on consumers minds. Prices and inflation, tariffs and trade, and politics continued to dominate concerns, but December saw rising mentions of immigration, global conflicts, and personal finance issues such as interest rates, taxes, banking, and insurance.
The overall tone remained pessimistic, though slightly less so than in November, possibly reflecting fewer negative comments about inflation and a rebound in positive sentiment around interest rates following the Federal Reserves third rate cut of 2025 on December 10.
Even so, more consumers on balance expected interest rates to rise, and fewer anticipated further declines. Inflation expectations eased in December after rising the month before, while optimism about stock prices over the next year reached its highest level since January 2025.
Household finances painted a conflicted picture. Consumers assessments of their familys current financial situation slipped into negative territory for the first time in nearly four years. At the same time, expectations for future family finances improved to their most positive level since January.