Consumer Confidence Dips in January

Not so fast! After two consecutive months of gains, consumer confidence decreased slightly in January. The Conference Board Consumer Confidence Index now stands at 61.1, down from 64.8. A reading of 90, which has not been reached since the recession began in 2007, indicates a healthy economy.

Consumer spending accounts for about 70 percent of the economy. The Conference Board’s monthly Consumer Confidence Survey was conducted from Jan. 1 through Jan. 19. Shoppers were polled on their attitudes toward business conditions in general and what they expect business conditions to be in six months.

The Present Situation Index declined from 46.5 to 38.4, while the Expectations Index ticked down to 76.2 from 77 in December.

Consumers’ appraisal of current conditions was also less favorable in January. Those claiming business conditions are “good” decreased from 16.3 percent to 13.3 percent, while those proclaiming them to be “bad” increased to 38.7 percent from 33.5 percent. There were fewer people who thought that jobs are “plentiful” (6.1 percent from 6.6 percent), and more who claim they are “hard to get (43.5 percent from 41.6 percent).

Consumers anticipating that business conditions will improve in the next six months edged down to 16.6 percent from 16.8 percent, while those expecting them to worsen increased from 13.4 percent to 15.1 percent. The proportion of consumers expecting an increase in their incomes declined to 13.8 percent from 16.3 percent.

The outlook for the labor market, however, showed some improvement. Those expecting more jobs in the months ahead increased to 16.2 percent from 14 percent, while those fearing there will be fewer jobs declined to 19.5 percent from 20.2 percent.

“Consumers’ assessment of current business and labor market conditions turned more downbeat,” observed Lynn Franco, director of the Conference Board Consumer Research Center, in a statement. Recent increases in gasoline prices may have consumers feeling a little less confident this month.”