Consumers less upbeat at start of new year
After two months of gains to end 2011, a measure of consumer confidence begins the new year with a decline that reflects less upbeat assessments of business and labor conditions.
The Conference Board reported that its Consumer Confidence Index (CCI) fell nearly four points to 61.1. The index advanced a total of almost 24 points in November and December before losing some of that gain in January. Measures of current conditions and expectations both decreased in January.
“Consumers’ assessment of current business and labor market conditions turned more downbeat and is back to November 2011 levels,” said Lynn Franco, director of the Conference Board Consumer Research Center.
“Regarding the short-term outlook, consumers are more upbeat about employment, but less optimistic about business conditions and their income prospects.”
The Conference Board, a business research and membership group, bases the CCI on the results of monthly surveys of U.S. households.
Economists closely monitor the index because consumer spending accounts for more than two-thirds of economic activity in the country.
Consumer assessments of current conditions pulled down the Present Situation component of the CCI down more than eight points to 38.4.
The proportion of consumers responding to the surveys upon which the January index was based who described business conditions as “good” fell three points to 13.3 percent. The share of those who said conditions are “bad” rose more than five points to 38.7 percent.
The proportion of consumers who said jobs are “plentiful” slipped a half point to 6.1 percent. The share of those who said jobs are “hard to get” climbed nearly two points to 43.5 percent.
Consumers’ were slightly less upbeat in their outlook for the near term, bringing down the Expectations component of the CCI eight-tenths of a point to 76.2.
The share of consumers who expect business conditions to improve over the next three months edged down two-tenths of a point to 16.6 percent.
The proportion of those who anticipate worse conditions rose almost two points to 15.1 percent.
The share of consumers who expect more jobs to become available in coming months increased more than two points to 16.2 percent. The proportion of those who anticipate fewer job openings slipped seven-tenths of a point to 19.5 percent.
The proportion of consumers who expect their incomes to increase fell 2.5 points to 13.8 percent.