U.S. consumer confidence dropped in January for the third consecutive month, the Conference Board said Tuesday.
Despite a recent spate of positive economic data and improvements in the housing market, the Conference Board said the Consumer Confidence Index deteriorated further in January, dropping from 66.7 in December to 58.6.
Economists had expected a much milder decline,calling for a drop to 64..
The Conference Board uses 1985 as a base year, assigning the average confidence of 1985 a value of 100, giving the index a reference point.
In January, 16.7 percent of respondents to a survey that involves more than 5,000 households indicated they believed business conditions were "good," a drop from December, when 17.2 percent indicated economic conditions were favorable for business.
Respondents who indicated they believed business conditions were "bad" in January rose from 26.3 percent to 27.4 percent..
The percentage of respondents indicating jobs were "plentiful," fell from 10.8 percent to 8.6 percent while those indicating jobs were "hard to get" rose from 36.1 percent to 37.7 percent, the Conference Board said.
"Consumers are more pessimistic about the economic outlook and, in particular, their financial situation. The increase in the payroll tax has undoubtedly dampened consumers' spirits and it may take a while for confidence to rebound and consumers to recover from their initial paycheck shock," said Lynn Franco, director of the board's Consumer Research Center.
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