US consumer confidence remains under pressure

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US consumer sentiment edged higher in December, but the overall mood among households remains deeply subdued. Final data from the University of Michigan show the sentiment index rising by 1.9 points to 52.9, falling short of the 53.5 median estimate in a Bloomberg survey. Even with the improvement, sentiment is nearly 30% below its level in December last year.

Affordability concerns dominate outlook

Affordability remains the central issue weighing on consumers. Joanne Hsu, director of the survey, noted that pocketbook concerns continue to shape views of the economy. The gauge of current economic conditions fell to a record low in December, underscoring persistent scepticism about near-term financial stability.

Markets look past weak sentiment data

Financial markets appeared largely unfazed by the downbeat consumer outlook. US equities advanced despite the expiration of a record volume of options, an event that often heightens volatility. Gains were led by technology stocks, particularly firms investing heavily in artificial intelligence. The S&P 500 erased its weekly losses, with Nvidia and Oracle among the strongest performers.

Health policy uncertainty adds pressure

Political decisions are adding to household anxiety. The Republican-controlled Congress left Washington without extending Affordable Care Act subsidies, a move that could cause health insurance premiums for more than 20 million Americans to more than double in 2026. Combined with inflation and unemployment rising to 4.6%, the prospect of higher healthcare costs is weighing heavily on consumer confidence.

Rising debt and uneven policy impact

At the same time, tax cuts included in President Donald Trump’s economic legislation are set to push US federal debt beyond $40 trillion. While the measures largely benefit corporations and wealthier households, reductions in social support amplify the disconnect between strong financial markets and the lived reality of many consumers.

As International Investment experts report, persistently weak consumer sentiment in the US poses a structural risk to domestic demand. With household finances under strain and social uncertainty rising, economic momentum is increasingly reliant on capital markets and corporate investment rather than broad-based consumer spending.