Consumer confidence drops in December

American consumer confidence stands at 48.1 for December 2020, down more than four points from November.

According to the Refinitiv/Ipsos Primary Consumer Sentiment Index dropped 4.4 points from 52.5 in November. The Index had risen every month from August to October, when it reached 52.6, the highest score since dropping off in April due to the COVID-19 pandemic. 

The December decline occurred all indices, with the Current, Expectations, Investment, and Jobs sub‐indices down at least four points compared to the previous month. The Current, Expectations, and Investment indices (currently at 37.2, 60.4, and 41.2, respectively) are in line with sentiments as of August 2020. This stands in stark contrast to highs seen across those three indices in October (42.4, 66.1, 45.8).

The Jobs Index is the only sub‐index currently at a higher level than August 2020 (55.0 now vs. 51.9 in August). Nonetheless, year‐on‐year change reveals that all indices are suffering amidst the COVID‐19 pandemic, especially the Jobs index (down18.2 points). The Current ( down 17.9) and Investment (down 14.4) indices are all down around 15 points. In contrast, the Expectations index is down only six points, which Refinitiv and Ipsos say potentially points to positive future outlooks. 

"COVID‐19 cases, hospitalizations, and deaths, are climbing across the country. This, paired with new business shutdowns, appears to be greatly affecting American consumer confidence, which is down more than four points since last month. It is now at its lowest level since August after remaining virtually unaffected by the volatile election month,” said Chris Jackson of Ipsos. “The upward trend experienced prior to election has reversed drastically this month. This has completely undone any improvement seen over the last three months.”   

In addition, the Refinitiv U.S. Retail and Restaurant Q3 blended earnings index is showing a ‐6.6% estimate. “As another wave of COVID‐19 looms in the U.S., the index is expected to drop to ‐22.3% for Q4,” said Jharonne Martis, director of consumer research at Refinitiv. “Still, the strongest sectors include leisure and household products. This suggests that consumers continue to seek to improve their ‘stay‐at‐home’ experience this holiday season.”