Consumer Confidence Falls Again
Consumer confidence, which fell slightly in November, has fallen again this month, according to The Conference Board, a New York-based business and research nonprofit.
The board's Consumer Confidence Index, created from a survey of 5,000 households each month, fell 6.4 points to 65.1 in December.
Lynn Franco, director of economic indicators at The Conference Board, said in a statement that the results are likely due to the deadlock in Washington over pending federal tax increases and spending cuts.
"The sudden turnaround in expectations was most likely caused by uncertainty surrounding the oncoming fiscal cliff," Franco said.
She noted that a similar dip in confidence was seen in August 2011 during Congressional negotiations over raising the nation's debt ceiling.
Time is running out. The White House and Congress have until Monday to reach a deal to avert some combination of tax hikes and spending cuts.
The board's Expectation Index, which measures consumer outlook on business conditions, employment conditions and total family income for the next six months, fell sharply from 80.9 to 66.5.
But there was a bit of positive news in this month's survey. The Present Situation Index, which assesses the outlook on current business and employment conditions, increased to 62.8 from 57.4 in November.
"While consumers are quite negative about the short-term outlook, they are more upbeat than last month about current business and labor market conditions," Franco said.
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