U.S. consumer confidence has declined for five consecutive months, matching the longest losing streak since 2008.

The Consumer Confidence Index has declined for the fifth consecutive month, matching the longest losing streak since the 2008 financial crisis, continuing to reflect households’ concerns about high prices, the job market, and the economic outlook. Meanwhile, although the Richmond Fed Manufacturing Index rebounded from -15 to -7, remaining in contraction territory, businesses’ expectations for the next six months have turned strongly optimistic. Its business conditions, new orders, and employment expectation indices have all jumped to high positive levels, indicating that confidence in the medium-term outlook is rapidly building among business entities.

Data released Tuesday shows that the Conference Board’sComposite Economic Indexfell from 92.9 last month to 89.1, with this downward trend now matching the longest losing streak since 2008.

The sub-index measuring current conditions plunged to 116.8, the lowest level since February 2021. This index gauges consumers’ assessments of current business and labor market conditions, falling by 9.5 points this month. In contrast, the index reflecting expectations for the next six months remained flat at 70.7 in December, but has stayed below 80—a threshold traditionally signaling a recession—for 11 months in a row.

High prices and labor market concerns have held down consumer confidence throughout the year, keeping the index hovering near its lowest levels since the pandemic. Job growth is sluggish, the unemployment rate is rising, and inflation remains above the Fed’s target. Economists expect hiring to stay weak next year, with limited improvement in the unemployment rate, which may continue to dampen confidence levels.

Analysts also expect wage growth to slow further in 2026, which may lead to a divergence in spending among different income groups.

Business and Employment Outlook Both Weaken

Consumers’ assessment of current business conditions turned mildly pessimistic in December. 18.7% of respondents viewed business conditions as “good,” down from November’s 21.0%, while those seeing conditions as “bad” rose from 15.8% to 19.1%. This marks the first net negative evaluation since September 2024, a time of labor market panic and a deadly hurricane strike.

Perceptions of the labor market declined in tandem: the share of consumers saying jobs are “plentiful” fell from 28.2% to 26.7%, while those saying jobs are “hard to get” edged up from 20.1% to 20.8%, further narrowing the “labor market differential” that measures job market tightness.

Consumer pessimism has diverged. While concerns about business conditions have eased and the proportion expecting conditions to “worsen” in the next six months dropped from 25.8% to 21.8%, the share expecting “improvement” also slipped from 18.1% to 18.0%. Meanwhile, the outlook for the labor market grew gloomier: the percentage of respondents expecting “fewer” job opportunities rose from 26.8% to 27.4%, and those expecting “more” remained at 16.5%.

Inflation and Policy Factors Dominate Consumer Concerns

Dana M. Peterson, chief economist at the Conference Board, noted that in open-ended answers, consumers continue to cite prices and inflation, tariffs and trade, and political issues as dominant economic influences. However, in December, concern over immigration, war, and personal financial issues (such as interest rates, taxes and income, banking and insurance) rose noticeably.

Although overall responses remain pessimistic, the extent of pessimism eased compared with November. This may be due to fewer negative comments on prices, inflation, and politics, while positive views on interest rates notably rebounded. Notably, the Federal Reserve announced its third rate cut for 2025 on December 10, within the latter half of the survey’s sample period.

However, the data also show conflicting signals: the net share of consumers expecting rates to continue rising actually increased, while those expecting rates to fall decreased. On the other hand, the median and average expectations for inflation over the next 12 months both fell in December after rising in November. Meanwhile, the net value of consumers’ expectations for stock market performance in the next 12 months (bullish minus bearish) jumped to its most optimistic level since January 2025.

Cautious Trend in Big-Ticket Purchases

Consumers have become more cautious about buying large items in the next six months. While the share of respondents answering “yes” nudged higher in December, the number answering “no” increased and the “maybe” share fell. Car purchase intentions dropped again in December; calculated by a six-month moving average, expectations for new car purchases continued to decline, while used car buying plans continued to climb.

Expectations for buying homes also slipped modestly. Buying plans for household appliances fell across the board, as did plans for purchasing personal computers and laptops and video game consoles. By contrast, plans for spending on smartphones, tablets, and digital cameras continued a six-month upward trend. Used cars, TVs, and smartphones remained the most popular choices in their categories for future purchases.

Overall, 2025’s consumption trends are shifting toward low-cost and essential services, moving away from expensive and highly discretionary activities. In December, planned spending on services for the next six months changed little from November, but the proportion saying “yes” to more service purchases remained healthy. Vacation willingness continued its downward spiral, with domestic travel plans for the next half year still higher than international vacations, though both declined.

Difference in Income and Demographic Structure Apparent

The net view of households’ current financial situation fell into negative territory for the first time in nearly four years. But expectations for future household finances were the most positive since January this year. 18.4% of consumers expect incomes to rise, up from 17.6% in November, but the proportion expecting incomes to fall also rose from 12.5% to 14.7%.

Using a six-month moving average, confidence declined across all age groups in December, but confidence among consumers under 35 remained higher than those 35 and above. Millennials and Generation Z remain the most optimistic across all surveyed generations. By income, confidence fell across nearly every bracket except those earning under $15,000 and those above $125,000 per year. Consumers with incomes under $15,000 are still the least optimistic of all income groups.

The share of consumers who think a U.S. recession is “unlikely” in the next 12 months edged up to about one-fifth, while those who think it is “very likely” continued to fall. However, the largest group—those who consider recession “somewhat likely”—rose again, and the small minority who believe the U.S. is “already in recession” also increased slightly.

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