The surging pandemic, the return of lockdowns, and the 2020 election results pummeled consumer confidence for the second straight month in December.
The index of consumer confidence tumbled to 88.6 this month from a downwardly revised 92.9 in November, the Conference Board said Tuesday. Economists had forecast confidence would rise to 97 from the initial read of 96.1 for November.
The index was as high as 101.4 in October.
The gauge of how consumers feel the economy right now crashed to 90.3 in December from 105.9 in November, signaling a very rapid assessment of economic conditions.
The measure of that assess how Americans view the next six months climbed to 87.5 from a downwardly revised 84.3, likely on hopes that the vaccine will bring an end to the pandemic and restrictions on business and travel. But even this improvement comes with a negative because the November figure was revised down from an initial read of 89.5 and represents a steep decline from 98.2 in October.
“Consumers’ assessment of current conditions deteriorated sharply in December, as the resurgence of COVID-19 remains a drag on confidence,” said Lynn Franco, Senior Director of Economic Indicators at The Conference Board.
Four years ago, the index soared as consumers cheered the election of Donald Trump. The 2020 election has not generated similar enthusiasm, indicating Americans do not have much hope that a Biden presidency will be able to lift the U.S. economy out of its coronavirus pandemic induced doldrums.
Franco said that consumers’ vacation intentions, which had notably improved in October, have retreated.
“On the flip side, as consumers continue to hunker down at home, intentions to purchase appliances have risen. Overall, it appears that growth has weakened further in Q4, and consumers do not foresee the economy gaining any significant momentum in early 2021,” Franco said.
The measure of labor market conditions slipped underwater in December, with more Americans saying jobs are hard to get than those saying jobs are plentiful.
The University of Michigan’s index of U.S. consumer sentiment went in the opposite direction in early December, showing an unexpected improvement to the best level since March. That appeared to be based on improved hope among Democrats about the prospects for the economy in the aftermath of the election.
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