U.S. consumer confidence fell for the second month in a row in January, dropping to 104.1 from 109.5 in December, below economists’ expectations.

The decline reflected a weaker outlook on current economic conditions and the labor market.

Despite this, consumer spending remained strong, with retail sales rising 0.4% in December.

The proportion of consumers expecting a recession stayed low, but there are signs of rising credit card balances and delinquencies, the Associated Press has reported.

Consumer confidence remains an important indicator, as spending drives two-thirds of U.S. economic activity.

Written by B.C. Begley