By John Q. Hosedrinker 
According to the Conference Board, consumer confidence in the economy declined in December, marking the fifth consecutive monthly drop and approaching levels seen when tariffs were implemented. Concerns over high prices and President Trump’s tariffs were significant factors, though short-term expectations for income and job markets remained stable but below levels that could signal a recession. Notably, assessments of the current economic situation plummeted, and perceptions of the job market also worsened, as indicated by a decrease in those saying jobs were plentiful and an increase in those saying jobs were hard to get. AP News reported that despite the overall pessimism, the proportion of those surveyed who thought a recession in the next year was unlikely grew.
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Consumer confidence slumps to its lowest level since April, which is when the US rolled out tariffs, and the numbers are painting a pretty concerning picture. We’re seeing a definite downturn in how Americans feel about the economy, and it’s hitting a low point that’s mirroring the effects of those import taxes. This is a bit of a head-scratcher, especially when you hear the talk of strong GDP growth – it feels like a disconnect, with the official numbers saying one thing and the experiences of everyday people saying something quite different.
The reality, as many are seeing it, is that things feel a little bleak. The anecdotal evidence from the holiday shopping season is telling. Stores, even the normally bustling ones, seemed emptier. Some who have been in the luxury goods business for over 40 years, reporting a massive drop in revenue, even worse than the difficulties faced during the 2008 or the 2020 economic downturns. Order cancellations were the highest ever, and for the first time, days would go by without a single customer. It’s clear that consumer behavior has shifted dramatically, and it’s not a positive trend.
This change is also evident in other ways, like the decrease in job creation, which is a key indicator of economic health. We’ve seen job creation slow down quite a bit, even before potential revisions. This slower pace is a cause for concern, as is the rising worry about high prices and inflation. Consumers are feeling the pinch, and they’re worried about the cost of living. The price hikes, like the notable jump in the price of some coffee concentrate at the grocery store, are a visible sign of the economic pressure.
The data confirms what many are sensing – the worries are about high prices and the impact of tariffs. The consumer confidence index, as reported by the Conference Board, saw a significant drop, marking the fifth consecutive monthly decline. While the short-term expectations for the future remained somewhat stable, the current economic situation is taking a hit, and it’s becoming very clear. People are less optimistic about their present circumstances, and this is reflected in the lower confidence numbers.
The impact of these challenges is being felt across different aspects of life. From the lack of Christmas lights in certain neighborhoods to the shift in shopping habits, people are making tough choices. Many are prioritizing necessities and cutting back on discretionary spending. The quality of goods, especially toys, collectibles, and electronics, appears to have declined. All of these factors contribute to the overall negative sentiment.
Even with some reports of bustling malls and packed stores, these isolated examples do not fully reflect the broader economic reality. One can go out and look at the market and the experience might be very different in the various areas. A good example of this is the experiences of USPS and UPS carriers. They are experiencing significant drops in holiday volume this year compared to last year. While some may see packed stores, the overall trend is clear.
The economic indicators are starting to tell a conflicting story, and the disconnect between GDP growth and consumer confidence is quite jarring. The official numbers might show an apparently booming economy, but a significant portion of the population is feeling the opposite.
There’s a sense that these challenges are being exacerbated by policy decisions, particularly the tariffs. Write-in responses to the survey showed that prices and inflation remained consumers’ biggest concern, along with tariffs, despite repeated claims by the then-president that inflation is a hoax. The connection between these policies and the economic anxieties of the people is very clear. It’s a reminder that economic health involves more than just numbers and that the human experience and economic feeling are just as important.
The sentiment is that people are feeling the squeeze. There’s a prevailing feeling of survival mode, where people are focused on basic necessities and cutting back on anything extra. The reality is that the financial environment is not looking great and it is not looking great across the board. The impact of job losses, the increase in prices, and the uncertain economic future are all weighing heavily on people’s minds.
We’re facing a situation where aggregate economic activity is increasing, but the overall health of the consumer is not. While some might point to the strength of the economy, the current consumer confidence numbers and the individual experiences paint a picture of struggle. The economic well-being is not spread equally, and the majority of people are feeling the weight of the challenges.
The whole thing is giving off a feeling of stagnation, a sense that we’re headed towards a period of economic hardship. Many are expecting the holiday sales data to burst the stock bubble, and it has already begun for some. It is critical to recognize the limitations of focusing solely on the aggregate numbers and to consider the reality that many people are dealing with. As a result of this, it is becoming increasingly important to listen to the everyday experiences to understand what is truly happening with the economy.