The fiscal cliff appears to be dragging down consumer confidence.
The Consumer Confidence Index, a monthly survey by The Conference Board, dropped to 65.1 in December, down from 71.5 in November. The December numbers represent a four-month low in consumer confidence.
Consumers are less optimistic about the future. The percentage of consumers expecting business conditions to improve over the next six months declined to 17.6 percent in December from 21.3 percent in November. Respondents who predict business conditions will worsen increased to 21.5 percent from 15.8 percent. Those expecting their income to decline rose to 18.7 percent from 15.6 percent.
“Consumers’ expectations retreated sharply in December resulting in a decline in the overall Index. The sudden turnaround in expectations was most likely caused by uncertainty surrounding the oncoming fiscal cliff," says Lynn Franco, Director of Economic Indicators at The Conference Board. "While consumers are quite negative about the short-term outlook, they are more upbeat than last month about current business and labor market conditions.”
The monthly survey is done for The Conference Board by Nielsen and is based on a random sample of consumers. This month's results were based on data gathered through December 13.