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Consumer confidence readings paint a much weaker picture than is suggested by spending data. This likely reflects the bifurcation story whereby spending is being driven by a relatively small cohort of high-income households while middle and lower-income households are feeling more financial pressure and are more nervous about what the future holds.
is surprisingly weak, dropping to 84.5 from an upwardly revised December print of 94.2, and well below the 91.0 consensus prediction. The current conditions index and the expectations component fell by similar amounts with headline sentiment at its weakest since 2014 – so things are apparently worse for households today than they were post the ’Liberation Day’ fallout and the pandemic.It is fair to say that the relationship between sentiment and spending has broken down of late with sentiment surrounding the economic outlook at levels historically consistent with static spending, whereasexpanded at 3.5% growth in 3Q 2025. This divergence likely reflects the narrative that the top 20% of households by income are driving the growth story while the bottom 60% by income are treading water. It is the median household, which is going to be within that bottom 60%, that is reflected in the sentiment survey. This provides ongoing evidence of the K-shaped story of the US economy. The bottom 60% are worried about their jobs, worried about tariffs squeezing spending power and with Federal Reserve data showing that the bottom 60% of households hold only 15% of total household wealth, they have not benefited much from the surge in property and stock prices. The top 20% of households by income spend more on services, so are not impacted by tariffs to the same degree, have a better sense of job security, and they hold 70% of household wealth. This bifurcation shows little sign of changing in the near term.One of the key metrics that we look at within this Conference Board consumer confidence report is the jobs plentiful less jobs hard to get measure of how people see the jobs market. Only 23.9% of respondents think"jobs are plentiful" while 20.8% think"jobs are hard to get". The rest are unsure. This gives a net reading of 3.1%, which is the worst outcome since 2016. The chart suggests that the risk is thatcontinues ticking higher on the basis that people see and feel changes in the jobs market before they show up in the data.to continue moving monetary policy closer to a neutral setting. They are unlikely to do anything tomorrow, but we continue to look for at least two further rate cuts later in the year.This publication has been prepared by ING solely for information purposes irrespective of a particular user’s means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument.Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks. Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes.and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website. It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
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