Amid losses in the stock market as well as the government shutdown, consumer confidence has reached its lowest point in more than two years: A consumer sentiment survey reading from The University of Michigan dropped from 98.3 in December to 90.7 in the beginning of January, falling short of expectations and registering its lowest point since President Donald Trump’s election, Financial Times reported.
The market, by contrast, was expecting a higher preliminary reading — a result of 97. At the same time, an index that monitors views of consumers toward current economic conditions also fell, declining from 116.1 to 110. An index for consumer expectations also registered a decline, as that measure slipped from 87 to 78.3.
Richard Curtin, the chief economist of the University of Michigan survey, noted that the outlook for the year ahead for the United States economy showed concerns with volatility in the markets, tariffs and the partial federal government shutdown. Curtin said in a statement, according to the outlet, “aside from the direct economic impact from these various issues on the economy, the indirect effect meant that half of all consumers believed that these events would have a negative impact on Trump’s ability to focus on economic growth.”
In December, American consumer confidence reached its lowest level since July, plunging the most in just over four decades when it declined from 136.4 to 128.1. At the same time, the number of people who expected more jobs in the next six months declined to 16.6 percent from 22.7 percent. That drop marked the biggest decline as of 1977. The news is a harbinger, in a way, as Americans get less optimistic as the growth of the economy slows and the stock market falls.
The Conference Board’s Senior Director of Economic Indicators Lynn Franco noted, according to past reports in December, that news doesn’t bode well for those expecting an economic boon: “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,” she said.