Arthur J. Villasanta – Fourth Estate Contributor
Washington, DC, United States (4E) – The U.S. consumer confidence index, a critical measure of consumer confidence in the economy, recorded its worst decline in more than three years in December.
The much larger than expected drop has demoralized investors already nervous about the imminence of a global economic slowdown in 2019 that will include the United States.
The Conference Board over the weekend said its consumer confidence index fell in December to a reading of 136.4 points, the largest one-month drop since July 2015. It was lower by 8.3 points than the reading in November.
Based in New York City, the Conference Board, Inc. is a non-profit business membership and research group organization with a membership of some 1,200 public and private corporations and other organizations in 60 countries. The Conference Board publishes several widely tracked economic indicators, including the consumer confidence index.
The gloom descending over consumers is being matched by those plaguing investors. U.S. stocks traded much lower after the release of the Conference Board data.
The S&P 500 index dropped by 1.8 percent early on the afternoon of Dec. 27 while the U.S. dollar was weaker against a basket of currencies.
Investors remain worried the U.S. economy won’t stand-up to the headwinds battering it due to the global economic slowdown. Analysts said the highly volatile U.S. equity markets might lead to further drops in consumer confidence.
A further loss in consumer confidence will eventually make consumers more reticent about spending, said Stephen Stanley, chief economist at Amherst Pierpont Securities.
“It will definitely be worthwhile to keep a close eye on the various measures of consumer attitudes,” said Stanley.
The drop in consumer confidence in December was mostly fueled by falling measures of expectations, with more people expecting jobs will become scarcer.
Claims for state unemployment benefits trended higher between mid-September and mid-December, stoking concerns the U.S. economy is losing steam while jobs are getting fewer. Worries about the economy are being worsened by clear signs of weakness in the housing market.
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