Consumer confidence dipped in December, suggesting Americans are feeling less cheery — but are not downright gloomy — as they hit the malls during the holiday season.
According to an Associated Press report, the RBC Cash Index, based on the results of the international polling firm Ipsos, showed that confidence came in at 86.9. That was down from 92.4 in November and was the lowest reading since October.
Shoppers’ spirits can affect just how much they are willing to keep cash registers ringing during the crucial holiday sales period for retailers.
Consumer spending accounts for roughly two-thirds of all economic activity. Economists keep close tabs on confidence readings for clues about consumers’ appetite to spend.
Economists believed the slip in confidence was linked to the fact that energy prices, which had been falling, are now creeping up. Gasoline, selling at $2.25 a gallon at the end of November, is now hovering around $2.30. Surging energy prices this year caused some consumers to tighten their belts.
People also are nervous about how much the value of their home will be hurt by the housing slump, a development that would affect how wealthy people feel and their willingness to spend, economists said.
Also making people feel a bit uneasy is the extent to which the economy, which has been losing speed all year, will slow.
All those things are “resonating and making them feel a little queasy,” said economist Ken Mayland, president of ClearView Economics.
Consumers, however, are not feeling overly glum. Even with December’s dip, consumer confidence is running a bit better than the reading of 85.5 logged for the same month last year.