US consumer confidence saw a steep decline in December amid a sharp selloff on Wall Street and political turmoil in Washington, according to a monthly survey released Thursday. The cutoff date for the survey was December 13 - before the US government shutdown over funding for a border wall - but financial markets already were already showing the impact of President Donald Trump's trade conflict with China, as well as the prospect of a slowing economy amid rising interest rates.
The Conference Board's consumer confidence index fell more than eight points - the biggest change in any direction this year - to 128.1, the survey showed. That was five points below what economists forecast, and a retreat from the 18-year high of 137.9 last month. The decline was nearly all the result of the erosion of consumers' confidence in the short-term economic outlook, as the expectations index fell more than 13 points to 99.1, back below 100 for the first time in a year.
"While consumers are ending 2018 on a strong note, back-to-back declines in Expectations are reflective of an increasing concern that the pace of economic growth will begin moderating in the first half of 2019," said Lynn Franco, the Conference Board's director of economic indicators.
Analysts note that the decline reflects the falling stock market, which has erased all of the 2018 gains in just the last few weeks, and declined again early Thursday. Despite a strong labor market, consumers' feelings about six months in the future have been moderating, indicating a sense the economy may have peaked.
A much smaller share now expect to see more jobs ahead, and a slightly larger amount expect fewer jobs. The survey showed the same pattern about income. "Expectations regarding job prospects and business conditions weakened, but still suggest that the economy will continue expanding at a solid pace in the short-term," Franco said.
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