Consumer Confidence Crawls Inside Shell

December 27, 2012 10:43 AM EST
Consumer confidence waned in December, according to data released on Thursday. The Conference Board Consumer Confidence Index read 65.1, down from 71.5 in November, and significantly lowers than analyst expectations of 70.

Lynn Franco, Director of Economic Indicators at The Conference Board, ties the sudden turnaround in expectations with uncertainty surrounding the oncoming fiscal cliff. She said a similar decline was experienced in August of 2011 during the debt ceiling discussions.

Interestingly, while consumers are quite negative about the short-term outlook, they are more upbeat than last month about current business and labor market conditions, said Franco.

Those stating business conditions are "good" rose to 17.1 percent from 14.6 percent, while those stating business conditions are "bad" decreased to 27.3 percent from 31.2 percent.

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.

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