NEW YORK – Confidence among U.S. consumers fell this month, after rising last month for the first time since July, The Conference Board said today.
The Consumer Confidence Index this month fell to 87.9 points (1985 = 100 points), a decline of 2.7 points from the revised December level of 90.6, after rebounding last month from the November’s two-year low of 87.8 points. (READ MORE.)
Analysts had expected the index to fall to 87.0 points from the original December reading of 88.6, based on the median forecast from a Bloomberg News survey of 66 economists. (Their estimates ranged from 80 points to 92.)
“The modest improvement in Consumer Confidence last month was short-lived,” wrote Lynn Franco, director of The Conference Board Consumer Research Center. “Consumers’ appraisal of current business conditions is becoming more negative and their assessment of the job market – while slightly less negative than in December – is more negative than a year ago.”
The survey’s Current Conditions Index – reflecting consumers’ views of the economy right now – rose 2.4 points to 115.3 from December’s 112.9 points. But survey’s Expectations Index – reflecting the outlook for the next six months – fell 6.2 points to 69.6 from last month’s 75.8.
“Looking ahead, consumers are quite downbeat about the short-term future and a greater proportion expect business conditions and employment to deteriorate further in the months ahead,” Franco said. “In addition, the percentage of consumers anticipating an improvement in their earnings has declined and could potentially impact spending decisions.”
The share of consumers expecting business conditions to worsen rose to 16.0 percent from last month’s 14.1 percent while the share expecting improvement fell to 11.6 percent from the previous 13.8 percent.
“Concerns about housing and gasoline prices are weighing on consumer confidence, and the stock market declines don’t help,” Russell Price, senior economist at H&R Block Financial Advisors in Detroit, told Bloomberg News. “Still, until it starts to affect individuals, spending will stay positive.”
The Conference Board is a nonpartisan, nonprofit business membership and research organization with offices in New York City, Chicago and abroad. Its monthly Consumer Confidence Survey, conducted by research company TNS, is based on a representative sample of 5,000 U.S. households. Additional information is available at www.Conference-Board.org.
