Consumer Confidence: Surprise Decline As Future Expectations Fall

Bottom Line: Overall consumer confidence still remains very high. However, in falling more than expected in December, the expectations component is now at the low end of the elevated range established since the November '16 election. Consumers' assessments of their present situation was slightly higher. While not explicitly surveyed, there was a clear correlation with the timing of new US tax policy and a decline in consumers' assessment of the future conditions, especially in labor markets, where consumers expected fewer jobs in the months ahead. Consumer Confidence FELL by 6.5 points in December to 122.1, compared with market expectations for a decline to 128.0. The index is now 7.8% ABOVE its year ago level. Present Situation Index ROSE by 1.7 points to 156.6. The index is 26.8% ABOVE its year ago level. The Expectations Index FELL by 11.9 points to 99.1. The index is 6.9% BELOW its year ago level. The labor differential, the percentage of respondents who said jobs are “hard to get” from the percentage who said jobs are “plentiful” , moved lower by 0.2 points to 20.5.