US consumer confidence fell 8 points in
January, erasing all the gains made in 2012, the New York-based
Conference Board said Tuesday.
Consumer confidence dipped to 58.6 from a revised estimate of 66.7 in December.
The short term economic outlook remains grim, with just 15.4 per cent of those surveyed expecting improved business conditions over the next six months, down from 18.1 per cent a month earlier.
Lynn Franco, director of economic indicators at the board, suggested the sharp deterioration of consumer confidence may stem in part from the increase in payroll taxes.
"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."
Consumers also expressed pessimism about the job outlook, with 14.3 per cent expecting more jobs in the months ahead, down from 18.1 per cent in December.
The figures are based on a monthly survey of consumers conducted by the pollster Nielsen.
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