As a new year comes up around the corner, how are consumers feeling about the economy as this year ends? The latest monthly Consumer Confidence Index update, assembled by The Conference Board, found that confidence was down in December.
The November Consumer Confidence Index, which was reported at the time as a sharp drop, saw upward revisions due to data collected after the government shutdown had ended. Now, in December, the index fell by 3.8 points, from the revised November figure of 92.9 to 89.1.
“Despite an upward revision in November related to the end of the shutdown, consumer confidence fell again in December and remained well below this year’s January peak. Four of five components of the overall index fell, while one was at a level signaling notable weakness,” said Dana M. Peterson, the Conference Board’s chief economist, in a statement.
In a statement addressing low consumer confidence (made prior to the release of the Consumer Confidence report), Cotality Chief Economist Selma Hepp gave a pessimistic view of the current state of the economy:
“As the post-shutdown data begins to clarify the ‘true’ economic picture, our focus shifts to the underlying health of the labor market—specifically whether the DOGE-driven layoffs and their inevitable spillover effects are beginning to snowball into a broader acceleration of layoffs in 2026,” she said. “With consumer sentiment still pinned near historic lows, the economy is hitting a ceiling; we can no longer rely on a small cohort of affluent spenders to carry the weight of national growth if the broader workforce is retreating.”
The Consumer Confidence’s Present Situation Index that assesses consumers’ views on the current state of business and labor market conditions fell by 9.5 points month-over-month to 116.8 in December. The expectations index, measuring consumers’ short-term outlook for business conditions, the labor market and household incomes, held steady at 70.7.
A reading under 80 on this index suggests a recession is ahead, and the expectations index has held at a rating below 80 for the past 11 months. In the batch of consumer responses for this index, the largest share said that a recession in the next 12 months is “somewhat likely.” About one-fifth of respondents said a recession is “not likely,” while the number who said one is “very likely” inched down. On the other hand, the number of those saying there already is a recession also moved up.
Broken down among different demographics, confidence fell among all age groups on a six-month moving average, though consumers under 35 ranked more confident than those above 35. Also on a six-month average, confidence fell across all income brackets besides those earning under $15,000 (who are the least confident income group overall) and those earning more than $125,000.
Compare these findings to the University of Michigan’s latest Consumer Sentiment index, which reported slight improvements in consumer sentiment during December even if most surveyed consumers still expected unemployment to increase in 2026.
“Consumers’ write-in responses on factors affecting the economy continued to be led by references to prices and inflation, tariffs and trade and politics,” noted Peterson when breaking down consumers’ stated reasons for their economic outlooks. “However, December saw increases in mentions of immigration, war and topics related to personal finances—including interest rates, taxes and income, banks and insurance.”
But Peterson noted a “rebound in positive responses about interest rates” from consumers, likely due to the Federal Reserve cutting interest rates for the third time in 2025 during its December Federal Open Market Committee meeting. As a result, consumers’ median and average expectations for inflation in the next 12 months dropped down in December. Consumers’ expectations for the stock market was also at its highest point since January 2025.
For the full Consumer Confidence report, click here.
