Key Points
US Consumer Confidence drops for fifth straight month, underscoring growing unease among American households as inflation pressures and labor market uncertainty continue to weigh on economic sentiment. The latest data highlights how persistent price concerns and slowing job growth are reshaping how consumers view both their current situation and the months ahead.
The steady decline is becoming one of the longest confidence downturns since the global financial crisis, raising questions about consumer spending, hiring momentum, and the broader outlook for the U.S. economy in 2026.
US Consumer Confidence Declines to Near Pandemic-Era Lows
According to data released Tuesday by The Conference Board, the Consumer Confidence Index fell to 89.1 in December, down from 92.9 in November. This marks the fifth consecutive monthly decline, tying the longest losing streak since 2008.
The index now sits near some of its weakest levels since the pandemic, reflecting a year marked by stubbornly high prices, cautious hiring, and growing concern about future job prospects.
A closer look at the report shows a widening gap between how Americans feel about today versus what they expect tomorrow.
Present Conditions Sink as Job Concerns Grow
The survey’s present conditions gauge dropped sharply to 116.8, its lowest level since February 2021. This component measures consumer perceptions of current business conditions and employment availability.
Respondents cited fewer jobs being available and rising unease about income stability. While layoffs remain limited in many sectors, hiring momentum has slowed noticeably, reinforcing fears that the labor market is losing strength.
At the same time, inflation continues to erode purchasing power. Even as price growth has cooled from its peak, everyday expenses such as housing, food, and services remain elevated, leaving many households feeling financially stretched.
Expectations Hold Steady but Remain Cautious
In contrast, the expectations index, which reflects consumers’ outlook for the next six months, held steady in December. While stability might appear encouraging on the surface, economists note that expectations remain subdued compared with historical norms.
Consumers appear to be bracing for a prolonged period of modest growth rather than anticipating a sharp rebound. Many respondents expect job opportunities to remain limited and wage gains to slow further into next year.
This cautious outlook suggests households may continue to prioritize savings and essential spending, limiting discretionary purchases that typically drive economic expansion.
High Prices and Labor Market Anxiety Weigh on Sentiment
Throughout 2025, US Consumer Confidence has struggled to gain traction. Persistent inflation above the Federal Reserve’s target has kept interest rates elevated, increasing borrowing costs for mortgages, auto loans, and credit cards.
At the same time, job growth has moderated, and the unemployment rate has edged higher. While the labor market remains historically resilient, consumers are increasingly sensitive to signs of cooling, especially after several years of strong employment gains.
The combination of higher living costs and slower income growth has created a sense of financial fatigue, particularly among middle- and lower-income households.
Economists See Hiring Staying Tepid in 2026
Looking ahead, economists expect hiring to remain tepid next year, offering little relief for consumer sentiment. Projections suggest the unemployment rate may show only marginal improvement, keeping pressure on household confidence.
Wage growth is also expected to cool further in 2026. While slower wage gains could help ease inflation, they may also deepen disparities in consumer spending, with higher-income households maintaining demand while lower-income groups pull back.
This emerging divide could shape retail sales patterns, housing demand, and overall economic growth in the coming year.
Why US Consumer Confidence Matters for the Economy
US Consumer Confidence plays a critical role in shaping economic momentum. Consumer spending accounts for roughly two-thirds of U.S. economic activity, meaning prolonged pessimism can translate into slower growth.
When confidence falls, households tend to delay major purchases, reduce discretionary spending, and build savings as a precaution. Over time, this behavior can ripple through the economy, affecting corporate earnings, hiring decisions, and investment plans.
The current downturn in confidence suggests the economy may face continued headwinds even if inflation gradually cools.
Conclusion
The fact that US Consumer Confidence drops for the fifth straight month sends a clear signal that American households remain uneasy about the economic road ahead. Concerns about job security, slowing wage growth, and persistent price pressures continue to overshadow hopes for a near-term rebound.
While expectations have stabilized, confidence remains fragile, and economists warn that without stronger labor market momentum, sentiment may struggle to recover. As 2026 approaches, policymakers and businesses alike will be watching closely to see whether confidence finds a floor—or slips further under the weight of economic uncertainty.
