Fifth Month of Deterioration: U.S. Consumer Confidence Slides Sharply Amid Economic Uncertainty

The U.S. consumer confidence index continues its downward trajectory, marking the fifth consecutive monthly decline. According to Tuesday’s Conference Board report, sentiment dropped to 89.1 in December, down from November’s upwardly revised 92.9—a miss against economist expectations of 91.9.

Current Weakness Signals Growing Concern

The deteriorates trend in consumer outlook is becoming increasingly evident across multiple fronts. Dana M Peterson, Chief Economist at The Conference Board, highlighted that four of five components within the index showed declines, with one signaling particularly notable weakness in the overall gauge.

Breaking down the components, the present situation index experienced a sharp contraction, plummeting from 126.3 in November to 116.8 in December. In contrast, the expectations index held steady at 70.7—though this apparent stability masks a more troubling pattern.

Recession Warning Flashing

The most alarming signal emerges from the expectations index’s sustained weakness. For 11 consecutive months, this forward-looking measure has remained below the 80 threshold—the critical level historically associated with recession signals. This extended period below the warning benchmark suggests market participants increasingly anticipate economic headwinds ahead.

The gap between current conditions and future expectations reveals a disconnect: while some stabilization appears in near-term assessments, longer-term sentiment remains deeply pessimistic. This divergence underscores investor anxiety about the economic runway.

December’s deterioration, occurring despite November’s upward revision following the government shutdown conclusion, emphasizes that confidence erosion runs deeper than temporary policy disruptions. The monthly decline confirms consumer caution persists as a structural feature of the current economic environment rather than a passing phenomenon.