Consumer confidence dips at regional, national levels

New England consumers will enter 2019 less confident about economic conditions than they have been in a year.

The Conference Board’s Consumer Confidence Index, which is considered one of the nation’s leading economic indicators, was released Thursday and showed people’s expectations for the economic future took a significant hit in December, both at the regional and national level. The Consumer Confidence Index for the sixstate New England region fell by 11.53 percent in December to 109, while the national number was at 128.1, which was down 6 percent.

Donald Klepper-Smith, chief economist and director of research for New Haven-based DataCore Partners, called the drop in consumer confidence numbers “a sizable decline.”

“The stock market and consumer confidence are inextricably linked,” Klepper-Smith said. “People spend based on how they feel about the economy and given the recent declines in their (investment) portfolios, they’re not feeling much like spending.”

The consumer confidence index is not tracked at the individual state level, he said. Klepper-Smith said how the stock market performs in the first few months of 2019 will be critical in determining whether the national and regional economies are facing for a minor speed bump or headed for a deep economic ditch.

“There are some red flags right now, but we’re not in recession territory at the moment,” he said. “Let’s just say that for now, there is a slow down, a deceleration in economic growth. But the stock market plays such a major role here and there is not one economist who will honestly say they can tell you whether next 1,000 points of movement in the market will be up or down.”

Recessions, according to Klepper-Smith, “unfold a step at a time.”

“Good news begets good news and bad news begets bad news,” he said.

The nation — and to a lesser extent Connecticut— are nearing record territory in terms of the length of the economic recovery, Klepper-Smith said

“We’re at double the length of the average post war economic recession,” he said. “I don’t think we’ve had as pronounced a (positive) run before.”

One ominous economic cloud, according to Klepper-Smith, is the ratio of consumer debt as a percentage of disposable personal income.

“We’re more leveraged in terms of debt in the current economy than we were in 2007,” he said referring to the start of the most recent recession.