Key Consumer Confidence Gauge Drops
The Conference Board's widely watched consumer confidence index fell for a second straight month, erasing all of its gains from 2012 as consumers became more pessimistic about the economic outlook and their finances.
The index stands at 58.6 (1985 = 100), down from 66.7 in December. Consumers' views of the economy today fell to 57.3 from 64.6 on a similar scale. Meanwhile, the Expectations Index dropped to 59.5 from 68.1.
Lynn Franco, director of economic indicators at The Conference Board, attributed part of the drop to the 2 percent increase in the payroll tax at the start of the year. As a result, she said "it may take a while for confidence to rebound and consumers to recover from their initial paycheck shock."
Consumers' appraisal of current conditions deteriorated in January. Those claiming business conditions are "good" declined to 16.7 percent from 17.2 percent, while those stating business conditions are "bad" increased to 27.4 percent from 26.3 percent. Consumers' assessment of the labor market has also grown more negative. Those saying jobs are "plentiful" declined to 8.6 percent from 10.8 percent, while those claiming jobs are "hard to get" increased to 37.7 percent from 36.1 percent.
The monthly survey by The Conference Board is based on a probability-design random sample. It's conducted by Nielsen, a provider of information and analytics around what consumers buy and watch. The cutoff date for the preliminary results was Jan. 17.
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