Yahoo Finance

For the first time in five months, U.S. consumer confidence has fallen following signs of easing economic growth. The Conference Board's Consumer Confidence Index dropped to 135.7, from an 18-year high of 137.9 in October. Despite the fall, the numbers still remain near historically strong levels.

This survey measures the sentiments with regard to present economic conditions and what is to follow in the next six months. The survey is keenly followed as consumer spending accounts for about 70% of the U.S. economic activity. Consumers seem to be having a favorable outlook toward the economy as the months ranging from July -September saw spending rise at an annual pace of 4% —its fastest pace since late 2014. Consumer spending rose in October as well (read: 5 ETFs That Deserve Special Thanks in 2018).

However, the recent stock market fall has weighed on consumer sentiments. Additionally, the ever-escalating trade war and political gridlock after mid-term results affected optimism related to capital investments done by businesses.

Lynn Franco, the Conference Board's director of economic indicators said that overall consumers are still very confident about the pace of growth in early 2019. However, Franco cautioned that if the outlook for the economy dims further in the coming months, growth could be affected.

Share of respondents who feel that business conditions are going to improve in the next six months were at a five-month low of 22.5%. There was also growing pessimism surrounding growth in income as respondents expecting incomes to rise fell to a four-month low (read: Follow Goldman With These Commodity ETFs).

About 46.6% of the respondents said that jobs are “plentiful”—highest share since January 2001. However, the labor differential, which measures the gap between respondents saying jobs are plentiful and those who say they’re hard to get, hiked to a 17-year high, indicating the presence of opposing views for the labor markets.

Rising interest rates have affected the housing market, which seems to be suffering from a decline in demand. Per a report issued on Nov 27, S&P CoreLogic Case-Shiller 20-city index of property values rose at their lowest levels in two years for the month of September.

In a recent interview in New York, Federal Reserve Vice Chairman Richard Clarida sounded optimistic about the economic state of affairs and indicated that the Fed will stick to its plan of gradual rate hikes as long as economic data justify more possible hikes. This led to a rally in the greenback on Nov 27.