Consumer Confidence Heads The Wrong Way

Consumer Confidence is heading the wrong way.  The report is just on the heels of a weak Chicago Purchasing Managers reading, and this data from The Conference Board is going to likely dampen expectations yet again.

The Index fell to a lower level in January to 61.1.  This is down from the reading of 64.8 in December.  It is also way under projections.  Bloomberg had the consensus expectation at 68.0.  Dow Jones was also expecting a reading of 68.0 for the January reading.

The Present Situation Index fell even more than the median point to 38.4 from 46.5. The only good news is that the “Expectations Index” was down only slightly as it slid down to a reading of 76.2 in January from 77.0 in December.

Consumer confidence may have already been tempered by some other retail data and also by the consumer income and spending data seen of late.  Still, it is hard to say that a drop of this size was expected by any means.

• Can you just blame gasoline prices being higher?  That seems unlikely.  Here was a quote from the Conference Board: “Consumers’ assessment of current business and labor market conditions turned more downbeat and is back to November 2011 levels.  Regarding the short-term outlook, consumers are more upbeat about employment, but less optimistic about business conditions and their income prospects.  Recent increases in gasoline prices may have consumers feeling a little less confident this month.”

JON C. OGG