logo
Plus   Neg
Share
Email

U.S. Consumer Confidence Drops Amid Market Volatility, Government Shutdown

consumer-confidence-012919-lt.jpg

Reflecting a sharp decline in expectations, the Conference Board released a report on Tuesday showing a much bigger than expected drop in U.S. consumer confidence in the month of January.

The Conference Board said its consumer confidence index slumped to 120.2 in January after tumbling to a revised 126.6 in December.

Economists had expected the consumer confidence index to fall to 124.3 from the 128.1 originally reported for the previous month.

Lynn Franco, Senior Director of Economic Indicators at the Conference Board, noted expectations saw a significant drop due to financial market volatility and the government shutdown.

"Shock events such as government shutdowns (i.e. 2013) tend to have sharp, but temporary, impacts on consumer confidence," Franco said.

She added, "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 report said the percentage of consumers expecting business conditions will improve over the next six months dipped to 16.0 percent from 18.1 percent, while those expecting business conditions will worsen climbed to 14.8 percent from 10.6 percent.

Consumers' outlook for the labor market was also less favorable, the Conference Board said, with the proportion expecting more jobs in the months ahead falling to 14.7 percent from 16.6 percent and those anticipating fewer jobs rising to 16.5 percent from 14.6 percent.

Meanwhile, the present situation index edged down marginally to 169.6 in January from 169.9 in December, as consumers' appraisal of current conditions was little changed.

The percentage of consumers claiming business conditions are "good" was virtually unchanged at 37.4 percent, while those saying business conditions are "bad" slipped to 11.1 percent from 11.6 percent.

Consumers' assessment of the labor market was mixed, as those saying jobs are "plentiful" inched up to 46.6 percent from 45.5 percent but those claiming jobs are "hard to get" also crept up to 12.9 percent from 12.2 percent.

On Friday, the University of Michigan is scheduled to release its revised report on consumer sentiment in the month of January.

The preliminary report said the consumer sentiment index plummeted to 90.7 in January from the final December reading of 98.3. Economists had expected the index to dip to 97.0.

With the much steeper than expected drop, the consumer sentiment index tumbled to its lowest level since hitting 87.2 in October of 2016.

For comments and feedback contact: editorial@rttnews.com

Economic News

What parts of the world are seeing the best (and worst) economic performances lately? Click here to check out our Econ Scorecard and find out! See up-to-the-moment rankings for the best and worst performers in GDP, unemployment rate, inflation and much more.

Follow RTT
>