At the end of 2019, looking into 2020, U.S. Consumers were mixed in their assessment of the economy and the job market. While Consumers were confident in the current state of affairs economically, their opinion of the near future had soured.
The Conference Board's monthly analysis of U.S. consumers showed mixed results in December, a departure from November's more optimistic outlook. Consumer confidence as a whole slipped in December, dropping to 126.5 from 126.8. While not a drastic decrease in and of itself, it is a considerable decrease from the high of 137.9 in October of 2018. The seemingly minute decrease represents the increasingly mixed feelings of American consumers.
The index that measures consumer attitudes towards the current economy rose in December, indicating satisfaction with the current state of affairs. This confidence is offset by a slip in the future expectations index, which slipped significantly in December, indicating a lack of confidence in the future of the U.S. economy by consumers. Consumers had mixed feelings on the job market, with respondent claims of jobs being plentiful and claims of jobs being hard to attain both rising in December. The future outlook of the job markets also slipped, with the number of respondents expecting fewer jobs in the near future was higher than in November.
The takeaway from the December results of the Consumer Board's indices is clear: American consumers feel confident in the current status quo, but those feelings of economic security are likely to taper off in the near future given the poor prospects Americans expect in the near future. Given recent events, such as President Donald Trump stating that the trade war may (though at this point, it has) continue into 2020, and the economic blowback of continual tariffs, it is unsurprising that consumers have skepticism when it comes to how economic develops may pan out as the year progresses.
The growing skepticism is a cause for some concern, something reflected in both the Dow Jones Industrial Average (NYSE: DJI) and the S&P 500 Index (NYSE: SPY) slipping during trading on the day the report was released. It is worth noting, however, that while the Board's indices are showing a lack of confidence, it is still as of yet uncertain if this is the sign of a trend of decreasing consumer confidence. There are a litany of factors that could have caused the decrease in confidence, but there is also a wide array of factors that could reverse said decrease, such as an end to the U.S.-China trade war.