Jitters about the so-called “fiscal cliff” have consumers on edge.
The Conference Board says its Consumer Confidence Index, which had declined slightly in November, posted another decrease in December. It now stands at 65.1 (1985=100) -- down from 71.5 in November.
The Expectations Index declined sharply to 66.5 from 80.9, while the Present Situation Index rose to 62.8 from 57.4 last month.
The fiscal cliff
“Consumers’ expectations retreated sharply in December resulting in a decline in the overall Index, “ said Lynn Franco, director of Economic Indicators at The Conference Board. “The sudden turnaround in expectations was most likely caused by uncertainty surrounding the oncoming fiscal cliff. A similar decline in expectations was experienced in August of 2011 during the debt ceiling discussions. While consumers are quite negative about the short-term outlook, they are more upbeat than last month about current business and labor market conditions.”
- Consumers’ assessment of current conditions improved in December. Those seeing business conditions as “good” rose to 17.1 percent from 14.6 percent, while those who think business conditions are “bad” decreased to 27.3 percent from 31.2 percent.
- Consumers’ appraisal of the labor market was mixed. Those saying jobs are “plentiful” edged down to 10.3 percent from 11.0 percent, while those see jobs as “hard to get” declined to 35.6 percent from 37.4 percent.
- Consumers’ optimism about the short-term outlook plummeted in December. The percentage of consumers expecting business conditions to improve over the next six months declined to 17.6 percent from 21.3 percent, while those expecting business conditions to worsen increased to 21.5 percent from 15.8 percent.
- Consumers’ outlook for the labor market also turned more pessimistic. Those anticipating more jobs in the months ahead declined to 17.0 percent from 19.5 percent, while those expecting fewer jobs increased to 27.3 percent from 21.2 percent.
- The proportion of consumers expecting an increase in their incomes was virtually unchanged at 15.4 percent. However, those expecting their incomes to decline rose to 18.7 percent from 15.6 percent.
The monthly Consumer Confidence Survey, based on a probability-design random sample, is conducted for The Conference Board by Nielsen, a global provider of information and analytics around what consumers buy and watch. The cutoff date for the preliminary results was December 13.