By Matt Ott AP Business Writer consumers confidence
American consumers are feeling less confident in December, a business research group says.
The Conference Board said Monday that its consumer confidence index fell back in December to 104.7 from 112.8 in November. Analysts forecast a rise to a reading of 113.8. Consumers had been feeling increasingly confident in recent months, spending more in the run-up to the all-important holiday shopping season.
The consumer confidence index measures both Americans’ assessment of current economic conditions and their outlook for the next six months.
The measure of Americans’ short-term expectations for income, business and the job market tumbled more than a dozen points to 81.1. The Conference Board says a reading under 80 can signal a potential recession in the near future.
The proportion of consumers expecting a recession over the next 12 months remained stable.
The board reported Monday that consumers’ view of current conditions ticked down just more than a point to a reading of 140.2.
Consumers stepped up their spending at retail stores last month, contributing to a 0.7% rise in retail sales in November.
Another report showed that consumers increased their spending by a solid 0.4% from October to November, a sign that households continue to propel the economy. The U.S. economy grew at a healthy 3.1% annual rate last quarter, largely thanks to consumer demand.
Consumer spending accounts for nearly 70% of U.S. economic activity and is closely watched by economists for signs how the American consumer is feeling.
Notes from APS Radio News
According to the Federal Reserve Bank of New York, as of the beginning of the second quarter of 2024, total household debt was nearly $18 trillion; the rate of delinquencies had remained elevated, the report indicated.
Between the end of February of 2020 and the summer of 2022, the Federal Reserve added about $4.5 trillion to its holdings, during a period when shortages had developed due, in large part, to lockdowns that were imosed over the virus.
According to economists, rapid and massive infusions of “fiat” money tend to increase rates of inflation, especially during shortages of goods and services.
At other times, given monetary expansions, inflation can be more moderate, when productivity is high.
However, lockdowns increased unemployment and caused shortages & supply chain problems.
In 2023, Volkswagen reported that supply chain problems were affecting deliveries of various vehicles.
