News Column

US Consumer Confidence Dips Amid Fiscal Cliff Uncertainty

Dec. 27, 2012

US consumer confidence fell in December during the crucial holiday shopping season as uncertainty over political talks to avert sharp austerity measures weighed on Americans, the New York-base Conference Board said Thursday.

Consumer confidence dipped to 65.1 this month down from a revised estimate of 71.5 in November.

Views of the short term economic outlook were particularly grim, with just 17.6 per cent of those surveyed expecting improved business conditions over the next six months, down from 21.3 per cent a month earlier.

Lynn Franco, director of economic indicators at the board, pointed to uncertainty amid negotiations between US President Barack Obama and congressional Republicans to replace tax hikes and spending cuts with a more gradual deficit reduction package.

"The sudden turnaround in expectations was most likely caused by uncertainty surrounding the oncoming fiscal cliff," she said. "A similar decline in expectations was experienced in August of 2011 during the debt ceiling discussions. While consumers are quite negative about the short-term outlook, they are more upbeat than last month about current business and labour market conditions."

Consumers also expressed pessimism about the job outlook, with 17 per cent expecting more jobs in the next half year, down from 19.5 per cent in November.

The figures are based on a monthly survey of consumers conducted by the pollster Nielsen.

Source: Copyright 2012 dpa Deutsche Presse-Agentur GmbH

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