A new report shows consumer spending is unlikely to accelerate in early 2020

• An index measuring consumers' short-term outlook for income, business, and labor conditions fell to 97.4 in December from 100.3, according to a Tuesday report from The Conference Board.
• Growth and consumer spending are unlikely to gain momentum in early 2020, said Lynn Franco, director of economic indicators at The Conference Board in a press release.
• Consumer spending is an important economic indicator as it makes up roughly 70% of US GDP. In 2019, solid consumption has kept the economy afloat amid multiple recession signals.
• Read more on Business Insider.

A report released Tuesday shows that consumers are feeling less upbeat the future and may be hesitant spending early in the new year.

The Expectations Index, which measures consumers' short-term outlook for income, business, and labor market conditions, fell to 97.4 in December from 100.3 in November, according to the Tuesday report from The Conference Board. In the same month, an index tracking consumer assessment of current business and labor market conditions increased to 170 from 166.

"While consumers' assessment of current conditions improved, their expectations declined, driven primarily by a softening in their short-term outlook regarding jobs and financial prospects," Lynn Franco, director of economic indicators at The Conference Board, said in a press release.

She continued: "While the economy hasn't shown signs of further weakening, there is little to suggest that growth, and in particular consumer spending, will gain momentum in early 2020."

Consumer spending, which makes up roughly 70% of US GDP, has been a rare bright spot in the US economy this year amid a slew of recession signals. A slowdown in consumption could forecast weakness in other key parts of the economy such as the labor market and business spending.

Worries about the state of the labor market contributed to the low expectations index reading, the report showed. Those expecting more jobs in the months ahead fell to 15.3% from 16.5% in December, while those expecting fewer jobs increased to 14.9% from 13.4%.

Fewer consumers expect that they will make more money in the short term as well. Those expecting an improvement in short-term income declined to 21.1% from 22.9%, while those expecting their short-term income prospects to worsen ticked up.

Other reports have shown signs of distress in consumer spending. A UBS report in October found that consumers are struggling to cover expenses with their current incomes. And, a report in the same month from Bank of America Merrill Lynch said that consumer spending faces stronger headwinds than tailwinds going forward.