Not surprisingly, consumer confidence in the US fell again in December, The Conference Board said Tuesday.
The headline print came in at 88.6, down from a revised 92.9 in November and far below consensus, which was looking (hoping?) for 97.
The forecast range was 90 to 104.4 from nearly five dozen economists. So, this was worse than the most pessimistic guess.
The present situation gauge tumbled, dropping to 90.3 from 105.9. Expectations, on the other hand, rose to 87.5 from 84.3.
Needless to say, the headline miss was attributable in part to the rapid spread of the coronavirus.
“Consumers’ assessment of current conditions deteriorated sharply in December, as the resurgence of COVID-19 remains a drag on confidence,” Lynn Franco, Senior Director of Economic Indicators at The Conference Board, remarked. “As a result, consumers’ vacation intentions, which had notably improved in October, have retreated.”
Forgive the sarcastic derision, but: I’ll bet they have, Lynn.
There’s a silver lining, of sorts. “As consumers continue to hunker down at home, intentions to purchase appliances have risen,” Franco mused.
That underscores an ongoing shift in consumption patterns which, while positive for refrigerators, microwaves, washing machines, and home electronics, doesn’t seem to bode particularly well for an economy that depends heavily on the services sector.
Consumers’ assessment of the labor market deteriorated with the percentage of consumers saying jobs are “plentiful” falling from 26.3% to 21.8%. Those saying jobs are “hard to get” jumped to 22% from 19.4%. That makes sense because, after all, around 10 million people who had jobs in February, don’t have them now, and jobless claims are now back to levels seen in early September.
Expectations for the near-term outlook were reasonably constructive considering the circumstances. Consumers’ outlook for business conditions and the labor market over the next several months improved, presumably as a result of vaccine optimism.
Summing it up, Franco said that “overall, it appears that growth has weakened further in Q4, and consumers do not foresee the economy gaining any significant momentum in early 2021.”
Maybe — just maybe — Congress should have passed that stimulus bill sooner.