A previous version of this article had an incorrect historical for the level of consumer confidence in December. The report has been corrected.
The numbers: U.S. consumer confidence stumbled for the second straight month in December, hitting its lowest level since August and the second-lowest reading since the pandemic lockdowns earlier this year.
The index of consumer confidence fell to 88.6 this month from a revised 92.9 in November, the Conference Board said Tuesday. That’s the lowest level since August and not far above the 85.9 reading in May at the tail end of the pandemic lockups. Economists polled by MarketWatch had forecast confidence would rise to 96.7 in December. The index had hit 101.4 in October.
Confidence remains far below pre-pandemic levels. The index stood at 132.6 before the viral outbreak in February.
What happened: An index that tracks how consumers feel the economy right now dropped to 90.3 in December from 105.9 in November.
Another gauge that assess how Americans view the next six months – the so-called future expectations index – inched up to 87.5 from 84.3.
The outlook for the labor market deteriorated this month for the first time since August.
Big picture: Rising virus cases across the country and renewed restrictions on businesses are negative for sentiment. These are offset in part by rising home prices and news of the vaccine rollout. A separate measure of sentiment, from the University of Michigan, had improved in early December. The stimulus package passed Monday might brighten the outlook somewhat.
What the Conference Board said: “Overall, it appears that growth has weakened further in the fourth quarter, and consumers do not foresee the economy gaining any significant momentum in early 2021,” said Lynn Franco, senior director of economic indicators at the Conference Board.
What outside economists said: “An uncertain outlook is likely to weigh on sentiment until wide distribution of a vaccine, that will allow a more complete reopening of the economy,” said Rubeela Farooqi, chief U.S. economist at High Frequency Economics.
Market reaction: The Dow Jones Industrial Average
was down 131 points after the data was released.
Go to the news source: U.S. consumer confidence tumbles in December