The Conference Board reported on Tuesday that its consumer confidence index dropped 3.8 points to 89.1, falling short of economists’ forecasts of 91.0, according to a Reuters poll. The decline signals that households are becoming more cautious amid persistent uncertainties in the economy.
Dana Peterson, chief economist at the Conference Board, noted that consumers’ written comments highlighted ongoing worries about prices, inflation, tariffs, and trade, alongside political developments. In December, she said, “Mentions of immigration, war, and personal finance issues—including interest rates, taxes and income, banks and insurance—also rose noticeably.”
The moderation in confidence comes as consumers weigh higher costs, tighter financial conditions, and geopolitical concerns, all of which could temper spending in the coming months. Economists see this dip as consistent with expectations that household spending, a key driver of U.S. economic growth, may slow after the robust activity recorded in the third quarter.
Despite the decline, the index remains above levels seen during the sharpest COVID-era contractions, suggesting that while concerns are mounting, consumer sentiment has yet to reach a critical low.
This trend underscores the delicate balance facing policymakers and businesses as they navigate an environment of high inflation, rising interest rates, and ongoing global uncertainties.