U.S. President-elect Donald J. Trump won the popular vote at November’s presidential election, but could some consumers who voted for him now have second thoughts?
The Conference Board (TCB) said on Monday its Consumer Confidence Index fell by 8.1 points in December to 104.7. While the Present Situation Index fell just 1.2 points to 140.2, it was the Expectations Index—the component that measures outlook six months out—that tumbled 12.6 points to 81.1. That 81.1 level is just barely above the threshold of 80 that typically indicates a recession could be ahead.
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And in write-in responses to the latest survey on consumer views of the economy, TCB said mentions of politics, including the outcome of November’s elections, and tariffs continued to increase.
“Notably, a special question this month showed that 46 percent of U.S. consumers expected tariffs to raise the cost of living,” TCB said, adding that 21 percent said tariffs could create more U.S. jobs.
TCB’s chief economist Dana M. Peterson said the recent rebound in consumer confidence dropped back to the middle range that has prevailed over the past two years.
“Consumer views of current labor market conditions continued to improve, consistent with recent jobs and unemployment data, but their assessment of business conditions weakened,” Peterson explained. “Compared to last month, consumers in December were substantially less optimistic about future business conditions and incomes. Moreover, pessimism about future employment prospects returned after cautious optimism prevailed in October and November.”
According to TCB data points, consumers over 35 years old were less confident than their under-35 counterparts. And among income groups, the decline was concentrated in consumers with household earnings between $25,000 and $100,000. Respondents at the bottom and top of the income range reported limited changes in confidence levels.
The less optimistic outlook for business conditions and the assessment of the future labor market were factors in the December drop in expectations. Only 21.7 percent of consumers expect business conditions to improve, down from 24.7 percent in November. And 18.3 percent expect business conditions to worsen, up from 15.9 percent. As for the labor market, 19.1 percent expect more jobs to be available, down from 22.8 percent in November. and 21.3 percent expect few jobs, up from 17.9 percent.