Consumer confidence slipped in January after two consecutive months of gains, signaling that the expanding economy might be finally cooling off.
The Conference Board’s Consumer Confidence Index fell three points in January to 61.1, down from 64.8 in December, according to a news release issued Tuesday by the New York-based research association. The index had been making steady strides, ballooning from 40.9 in October, to 55.2 in November, and apparently peaking in the last month of the year.
The board attributed the drop to consumers’ more pessimistic evaluation of current and future business and the labor market conditions.
The lone bright spot in 2012 was an increase in the number of consumers expecting more jobs in the months ahead.
“Consumers’ assessment of current business and labor market conditions turned more downbeat and is back to November 2011 levels,” said Lynn Franco, director of the Conference Board Consumer Research Center. “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."
Financial services group Credit Suisse also reported a “surprise decline” in consumer confidence Tuesday, but the Gallup Economic Confidence Index ended last week at a level similar to that of each of the past three weeks. The polling company reported in its news release that “confidence is up compared with December, and much improved over the highly negative readings of last fall and late summer.”