Consumer confidence fell unexpectedly in December

U.S. consumer confidence fell in December to 52.5, weighed down by worries about jobs, the Conference Board stated. November’s Confidence figure was upwardly revised to 54.3 from the prior estimate of 54.1.

Despite this month's modest decline, consumer confidence is no worse off today than it was a year ago, said Lynn Franco, director of Conference Board's consumer research center.
Consumers' assessment of the current state of the economy and labor market remains tepid, and their outlook remains cautious, said .

Franco added, however, that the economic expansion is likely to continue next year, but that the pace of growth will remain moderate.

Moreover, an indication of consumers' expectations fell to 71.9 in December from 73.6 in November, while consumers' assessment of the present situation fell to 23.5 from 25.4.

This data was unexpected, given the good news on the retail sales front and the December Reuters/University of Michigan consumer sentiment report, said IHS Global Insight's U.S. Economist Chris Christopher.

“Today’s consumer confidence reading was driven by an uptick in consumer pessimism about their current economic situation and outlook,” he said. “Respondents also felt more pessimistic about their current and future employment and income prospects.”

In addition, Christopher noted, the report indicates that consumers are still in a fragile state and confidence remains at depressed levels despite strong holiday retail sales, low prices, and a relatively robust stock market.

“The poor housing market performance, high gasoline prices, and a lackluster job market are keeping consumers in a tepid mood,” he added.