U.S. consumer confidence drops 6 points in Jan.
BOSTON – Jan. 29, 2019 – January's Consumer Confidence Survey decreased following a decline in December. It now stands at 120.2 down from 126.6 one month earlier.
The Present Situation Index – based on consumers' assessment of current business and labor market conditions – declined marginally, from 169.9 to 169.6. The Expectations Index – based on consumers' short-term future outlook for income, business and labor market conditions – decreased from 97.7 last month to 87.3 this month.
"Consumer confidence declined in January, following a decrease in December," says Lynn Franco, senior director of economic indicators at The Conference Board. "The Present Situation Index was virtually unchanged, suggesting economic conditions remain favorable. Expectations, however, declined sharply as financial market volatility and the government shutdown appear to have impacted consumers."
According to Franco, "Shock events such as government shutdowns (i.e. 2013) tend to have sharp, but temporary, impacts on consumer confidence. Thus, it appears that this month's decline is more the result of a temporary shock than a precursor to a significant slowdown in the coming months."
The percentage of consumers claiming business conditions are "good" was virtually unchanged at 37.4 percent, while those saying business conditions are "bad" decreased from 11.6 percent to 11.1 percent.
Consumers' assessment of the labor market was mixed. Those stating jobs are "plentiful" increased from 45.5 percent to 46.6 percent, while those claiming jobs are "hard to get" also increased, from 12.2 percent to 12.9 percent.
Short-term future expectations
The percentage of consumers expecting business conditions to improve over the next six months decreased from 18.1 percent to 16.0 percent, while those expecting business conditions to worsen increased from 10.6 percent to 14.8 percent.
Consumers' outlook for the labor market was also less favorable. The proportion expecting more jobs in the months ahead decreased from 16.6 percent to 14.7 percent, while those anticipating fewer jobs increased, from 14.6 percent to 16.5 percent.
Regarding their short-term income prospects, the percentage of consumers expecting an improvement declined from 22.4 percent to 18.2 percent, but the proportion expecting a decrease also declined, from 7.6 percent to 7.1 percent.
The monthly Consumer Confidence Survey, based on a probability-design random sample, is conducted for The Conference Board by Nielsen.
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