Consumer confidence in the U.S. stumbled again in December, showing that optimism among everyday households continued to fade at the end of the year. The measure, known as the Consumer Confidence Index, reflects how people feel about the current state of the economy and their own financial outlook. It combines survey responses about personal finances, job prospects, and future expectations to gauge overall sentiment among consumers.
The Conference Board reported that its consumer confidence index fell to 89.1 in December, marking its fifth consecutive monthly decline and the weakest reading since tariffs were put in place earlier this year. Historically, confidence levels below 90 have signaled widespread anxiety about job security and personal finances, both of which often influence consumer spending, a major driver of the U.S. economy.
Economists describe the latest reading as a sign that prolonged price pressures are wearing down even those who have managed to keep steady employment. “Consumers are feeling worse and worse,” said Yelena Shulyatyeva, senior U.S. economist at The Conference Board, who noted that concerns about current conditions deepened during one of the most active shopping months of the year. When confidence erodes ahead of the holidays, it typically means households are prioritizing essentials over discretionary spending.
The decline also aligns with findings from the University of Michigan’s final December survey, which showed that consumer sentiment was more negative compared to last year despite a slight month-over-month improvement. Many respondents expect higher unemployment in the year ahead, reflecting a population bracing for tougher conditions in 2026. While wage growth has helped offset rising prices for some groups, those gains have not restored the purchasing confidence consumers expressed earlier in the recovery phase.
Price stability remains a central issue. The U.S. Consumer Price Index (CPI) recorded elevated readings through much of the year. Although inflation has eased from its earlier peaks, costs for essentials like housing, food, and transportation stayed stubbornly high in December. For middle- and lower-income households, even small cost increases can significantly affect daily budgeting decisions, leading to pessimism about near-term economic conditions.
Tariffs have compounded that strain. Import duties on consumer goods and materials have raised costs for many companies, which then pass some of those expenses onto consumers. The effect is most visible in product categories such as electronics and household items, where markups have persisted since tariff policies were enacted. Economists say that even modest increases in trade-related prices can have a psychological effect, reinforcing the perception that “everything costs more.”
The slump in sentiment may also hint at shifting expectations for 2026. After enduring several years of uneven economic recovery, many Americans remain cautious about job opportunities and savings growth. That caution could mean slower retail and service-sector momentum in the first quarter of next year. Analysts at The Conference Board expect only gradual improvements in confidence unless price pressures ease more quickly or wages accelerate further.
Consumers have proved resilient through much of the post-pandemic period, maintaining spending even amid inflation concerns. Yet, the repeated monthly declines in confidence suggest fatigue may be setting in. If buying slows down while inflation remains above target, the U.S. economy could see weaker growth momentum early next year. Still, some economists argue that a pullback in consumer activity might help rebalance demand, allowing inflation to cool further without severe job losses.
While December’s data does not necessarily signal a recession, it does capture a larger feeling of economic hesitation. Many Americans appear to be recalibrating their expectations and adjusting to a slower pace of improvement. The holiday season often reflects how people see their financial stability and future prospects, and this year’s mood shows more caution than cheer. If inflation and tariffs remain high into 2026, it may take more than optimism to restore confidence in household spending and economic growth.
