Consumer confidence dropped by more than expected in January, according to the latest reading from the Conference Board.
The consumer confidence index fell to 111.8, below economists’ expectations of a drop to 112.8.
This follows the December’s reading, which saw consumer confidence climb to a post-recession high of 113.7. At the time, the Conference Board attributed the surge “solely” to increasing expectations.
“The decline in confidence was driven solely by a less optimistic outlook for business conditions, jobs, and especially consumers’ income prospects,” Lynn Franco, Director of Economic Indicators at The Conference Board, said in the report.
“Consumers’ assessment of current conditions, on the other hand, improved in January. Despite the retreat in confidence, consumers remain confident that the economy will continue to expand in the coming months.”
Notably, consumers’ short-term outlook, which increased significantly in December, backtracked in January. The percentage of those expecting business conditions to improve over the next six months dropped to 23.1% from 24.7%. Meanwhile, those expecting business conditions to worsen rose to 10.7% from 8.9%.
Additionally, the percentage of those expecting more jobs in the upcoming months decreased to 19.8% from 21.7%, while those expecting less jobs was unchanged at 14.0%. The percentage of those expecting incomes to increase dropped to 18.0% from 21.5%, while the proportion of those expecting a decrease increase to 9.6% from 8.6%.