US consumer confidence retreats in January

[WASHINGTON] US consumer confidence retreated in January after hitting a 15-year high in December, amid a less optimistic outlook for business and jobs, the Conference Board said Tuesday.

The consumer confidence index slipped to 111.8 from 113.3 in December; however, that level is still higher than at any time since July 2008, prior to the outbreak of the global financial crisis.

The expectations index, however, fell nearly seven points to 99.8.

"The decline in confidence was driven solely by a less optimistic outlook for business conditions, jobs, and especially consumers' income prospects," said Lynn Franco, the Conference Board's director of economic indicators.

However, Ms Franco noted, "Despite the retreat in confidence, consumers remain confident that the economy will continue to expand in the coming months."

Confidence in the current situation remained healthy, and improved slightly from December, with 27 per cent of consumers surveyed viewing jobs as plentiful, and 29 per cent labelling business conditions as "good".

But the outlook for six months out worsened slightly, with 23 per cent viewing business conditions as good, from nearly 25 per cent the prior month, and less than 20 per cent describing jobs as plentiful, from nearly 22 per cent in December.

Only 18 per cent expect incomes to increase, compared to 21.5 per cent the prior month.

Ian Shepherdson, chief economist with Pantheon Macroeconomics, said the decline in confidence is "more evidence that the post-election spike in confidence is over".

AFP