The new year got off to a rocky start insofar as the way consumers see things.
The Conference Board reports its Consumer Confidence Index dipped a point and a-half in January after hitting a 15-year high a month earlier.
Although the Present Situation Index rose from 123.5 to 129.7, the Expectations Index dropped to 99.8 from 106.4 in December.
“The decline in confidence was driven solely by a less optimistic outlook for business conditions, jobs, and especially consumers’ income prospects,” said Conference Board Director of Economic Indicators Lynn Franco. “Consumers’ assessment of current conditions, on the other hand, improved in January. Despite the retreat in confidence, consumers remain confident that the economy will continue to expand in the coming months.”
The nuts and bolts
Consumers were fairly optimistic about January's conditions. Those who saw business conditions as “good” rose slightly from 28.6% to 29.3%, while those saying business conditions are “bad” went from 17.8% to 16.1%.
Their assessment of the labor market was also more positive than it was last month. The percentage of consumers who said jobs are “plentiful” rose from 26.0% to 27.4%, while those who think jobs are “hard to get” fell from 22.7% to 21.5%.
The short-term outlook, which had increased considerably in December, declined in this month. The percentage of consumers expecting business conditions to improve over the next six months dropped from 24.7% to 23.1%; those expecting business conditions to worsen increased from 8.9% to 10.7%.
Consumers’ outlook for the labor market was somewhat mixed. The proportion expecting more jobs in the months ahead fell from 21.7% to 19.8%, while those anticipating fewer jobs was virtually unchanged at 14.0%. The percentage of consumers expecting their incomes to increase fell to 18.0% from 21.5%, while the proportion expecting a decline rose from 8.6% to 9.6%.
The monthly Consumer Confidence Survey, based on a probability-design random sample, is conducted for The Conference Board by Nielsen, a provider of information and analytics around what consumers buy and watch. The cutoff date for the preliminary results was January 19.