Consumer confidence dipped in December but positive developments since the latest survey suggests to the Wells Fargo Economics group that there will be some near-term upside, and the relatively high score remains supportive of consumer spending.

 

Confidence levels did fall short of expectations when taking into account the record highs reached in the stock market and a moderation of gas prices, but the survey was taken when less was known about the recently signed Phase 1 trade deal with China, meaning at that time, more tariffs on consumer goods were still a possibility.

The drop in the score, which came in at 126.5, was led by the expectations component as fewer households are expecting incomes to rise. On the other hand, strong hiring made households more upbeat, which was reflected in the present conditions component.

"Spending momentum has eased up through the first two months of the fourth quarter, but with confidence still high, we expect consumer spending to remain a key driver of growth in the fourth quarter and into the new year," stated the economics group.