Consumer confidence falls in January
Index tumbles after posting a modest gain in December. Short-term outlook turns bleak.
NEW YORK (CNNMoney.com) -- Consumer confidence slipped in January, after rebounding slightly in December, amid mounting concerns about jobs and slowing business activity.
The New York-based Conference Board said Tuesday that its Consumer Confidence Index fell to 87.9, down from 90.6 in December. Analysts had expected a decline to 87.0, according to Briefing.com.
The index had declined through the summer but rose slightly in December. However, the Conference Board says last month's rebound was short lived and that the outlook for the next few months has turned pessimistic.
The group's Expectations Index declined to 69.6 from 75.8.
"Looking ahead, consumers are quite downbeat about the short-term future and a greater proportion expect business conditions and employment to deteriorate further in the months ahead," said Lynn Franco, Director of The Conference Board Consumer Research Center.
Consumers expecting business conditions to worsen over the next six months increased to 16.0 percent from 14.1 percent, while those anticipating business conditions to improve decreased to 11.6 percent from 13.8 percent.
The percent of consumers expecting fewer jobs in the months ahead rose to 21.5 percent from 19.9 percent, while those anticipating more jobs eased to 10.5 percent from 10.9 percent.
As for present-day conditions, the index registered a slight increase, but overall the numbers are "less than favorable," according to the Conference Board.
Consumers claiming business conditions are "bad" rose to 20.0 percent from 18.8 percent, while those claiming business conditions are "good" decreased to 20.7 percent from 21.2 percent.
The percentage of consumers saying jobs are "hard to get" eased to 20.1 percent from 22.7 percent, while those claiming jobs are "plentiful" edged up to 23.9 percent from 23.6 percent in December.
Deterioration in the housing and credit markets, which began last summer, has caused widespread instability in the domestic and world equity markets and raised fears that the U.S. economy may slip into a recession.
The weakening housing market, in particular, will caused many consumers to curb spending, according to Len Blum, an investment banker at Westwood Capital.
"Consumers aren't going to be able to take money out of their homes and put that money back into the economy," he said.