Consumer confidence fell for the fifth consecutive month in December, dropping to its lowest level since the Trump administration's tariffs first went into effect in April. The Conference Board Consumer Confidence Index declined 3.8 points to 89.1, well below the January 2025 peak and signaling deepening pessimism among American households.

The December Numbers

The Conference Board's survey revealed broad-based deterioration:

  • Consumer Confidence Index: 89.1, down from 92.9 in November
  • Present Situation Index: Plunged 9.5 points to 116.8
  • Expectations Index: Held steady at 70.7

The Expectations Index has now remained below 80 for eleven consecutive months—the threshold below which the gauge historically signals recession ahead.

What's Weighing on Consumers

Labor market concerns: The survey found 26.7% of consumers said jobs were "plentiful," down from 28.2% in November. Meanwhile, 20.8% said jobs were "hard to get," up from 20.1%. The unemployment rate rose to 4.6% in November, the highest since 2021.

Inflation and prices: Consumer write-in responses continued to be dominated by references to prices and inflation, tariffs and trade, and politics. The cumulative effect of three years of price increases has left many households feeling poorer.

Family finances: Consumers' views of their family's current financial situation collapsed into negative territory for the first time in nearly four years.

Expert Analysis

"Despite an upward revision in November related to the end of the shutdown, consumer confidence fell again in December and remained well below this year's January peak," said Dana M. Peterson, Chief Economist at The Conference Board. "Four of five components of the overall index fell, while one was at a level signaling notable weakness."

The Say-Do Gap Persists

Perhaps the most puzzling aspect of 2025's economy: consumers say they feel terrible, but they keep spending. Holiday retail sales are on track to exceed $1 trillion for the first time ever, even as confidence surveys show record pessimism.

This "say-do gap" suggests several possibilities:

  • Survey responses reflect political sentiment more than economic reality
  • Consumers are drawing down savings and taking on debt to maintain lifestyles
  • Wealthy households, who drive much of consumption, feel better than average respondents

Holiday Spending Context

Despite the confidence collapse, holiday spending has been robust:

  • Black Friday: Record $11.8 billion in online spending
  • Holiday season: On track for first-ever $1 trillion total
  • E-commerce: Up 7.8% year-over-year

The disconnect between sentiment and spending behavior continues to confound economists.

Credit Card Debt Rises

One explanation for sustained spending: consumers are taking on more debt. Credit card balances have risen throughout the holiday season, with buy-now-pay-later services posting significant growth. Adobe forecasts $20.2 billion will be spent through BNPL this holiday season, up 11% from 2024.

What It Means for 2026

The confidence data has important implications:

For the Fed: Weak sentiment could support the case for rate cuts, even as spending remains resilient.

For retailers: The gap between attitudes and actions may narrow if consumers finally pull back—a risk heading into 2026.

For investors: Consumer discretionary stocks could face headwinds if sentiment eventually translates into reduced spending.

The Bottom Line

Consumer confidence has fallen to its lowest level since tariffs shook the economy in April. While Americans keep spending, the underlying pessimism suggests fragility. If sentiment eventually translates into behavior, 2026 could see the consumer-driven economy finally slow. For now, the say-do gap provides a cushion—but it's unclear how long that disconnect can persist.