High inflation and employment concerns squeeze American consumer confidence, which has rebounded slightly but falls short of expectations.

Consumer confidence in the United States saw a slight increase in December, but it was lower than market expectations, with overall sentiment still at a low level, reflecting the continued pressure on consumer confidence from high living costs and uncertain employment prospects. Data released by the University of Michigan on Friday showed that the final consumer confidence index for December rose by 1.9 points to 52.9, slightly below the median expectation of 53.5 among economists. The index improved from the previous month but still remained significantly depressed. Joanne Hsu, director of the University of Michigan Consumer Survey, said in a statement that despite some signs of improvement at the end of the year, consumer confidence was still nearly 30% lower than in December 2024, with household financial pressures continuing to dominate consumer views of the economy. Looking at the sub-indexes, the current conditions index fell to 50.4, hitting a record low, while the expectations index rose to a four-month high. Consumers' assessment of current purchasing conditions for big-ticket items such as cars and appliances deteriorated to record lows, indicating that the high inflation environment is significantly suppressing consumer willingness to spend. Analysis points out that high cost of living and concerns about the job market are the main reasons holding back consumer confidence from recovering from near historic lows. The unease about personal financial situations has become a significant risk factor for future household spending prospects, even though overall consumer resilience has been maintained so far. Employment data has also failed to boost confidence. Nonfarm payroll growth in the United States remained weak in November, with the unemployment rate rising to 4.6%, hitting a four-year high. Economists generally expect that employment growth will remain moderate next year, with limited room for improvement in the unemployment rate, which could continue to pressure consumer sentiment. To prevent further deterioration of the job market, the Federal Reserve cut interest rates for the third consecutive time earlier this month. However, there are still differences in the decision-making body's interest rate path for next year, as they need to balance between supporting employment and preventing inflation rebounds. Although this month's survey showed slight improvement in consumer expectations for the labor market, Hsu pointed out that nearly two-thirds of respondents still expect the unemployment rate to continue to rise in the coming year. In terms of inflation expectations, consumers expect an average annual inflation rate of 4.2% in the next year, dropping to a low point in nearly a year; the long-term inflation expectation for the next 5 to 10 years is 3.2%.