(AXcess News) New York – The Conference Board survey showed a decline of 8.1 basis points in January with a reading of 58.6 compared to 66.7 in December.
The decline in consumer confidence was attributed to the recent increase in payroll tax, according to Lynn Franco, Director of Economic Indicators at The Conference Board.
“Consumer Confidence posted another sharp decline in January, erasing all of the gains made through 2012. Consumers are more pessimistic about the economic outlook and, in particular, their financial situation, ” said Franco. “The increase in the payroll tax has undoubtedly dampened consumers’ spirits and it may take a while for confidence to rebound and consumers to recover from their initial paycheck shock.”
The Conference Board’s current condition also deteriated. Those claiming business conditions are “good” declined to 16.7 percent from 17.2 percent, while those stating business conditions are “bad” increased to 27.4 percent from 26.3 percent. Consumers’ assessment of the labor market has also grown more negative. Those saying jobs are “plentiful” declined to 8.6 percent from 10.8 percent, while those claiming jobs are “hard to get” increased to 37.7 percent from 36.1 percent.
Consumers’ optimism about the short-term outlook continued to deteriorate in January. Those expecting business conditions to improve over the next six months declined to 15.4 percent from 18.1 percent. However, those expecting business conditions to worsen declined slightly to 20.6 percent from 21.1 percent.
Consumers’ outlook for the labor market was more pessimistic. Those anticipating more jobs in the months ahead declined to 14.3 percent from 17.9 percent, while those expecting fewer jobs remained virtually unchanged at 27.0 percent. The proportion of consumers expecting their incomes to decline rose to 22.9 percent from 19.1 percent, while those anticipating an increase declined to 13.6 percent from 15.6 percent.