UPDATE: The Consumer Confidence release is out.Click here for updates >
The index tanked to 65.1. Economists were expecting a smaller slide to 70.0 from last month’s 73.7 reading.
According to Bloomberg, this is the biggest drop in the index since August 2011.
Below, the full release from the Conference Board:
The Conference Board Consumer Confidence Index®, which had declined slightly in November, posted another decrease in December. The Index now stands at 65.1 (1985=100), down from 71.5 in November. The Expectations Index declined sharply to 66.5 from 80.9. The Present Situation Index increased to 62.8 from 57.4 last month.
The monthly Consumer Confidence Survey®, based on a probability-design random sample, is conducted for The Conference Board by Nielsen, a leading global provider of information and analytics around what consumers buy and watch. The cutoff date for the preliminary results was December 13.
Says Lynn Franco, Director of Economic Indicators at The Conference Board: “Consumers’ expectations retreated sharply in December resulting in a decline in the overall Index. The sudden turnaround in expectations was most likely caused by uncertainty surrounding the oncoming fiscal cliff. 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’ assessment of current conditions improved in December. Those stating business conditions are “good” rose to 17.1 per cent from 14.6 per cent, while those stating business conditions are “bad” decreased to 27.3 per cent from 31.2 per cent. Consumers’ appraisal of the labour market was mixed. Those saying jobs are “plentiful” edged down to 10.3 per cent from 11.0 per cent, while those saying jobs are “hard to get” declined to 35.6 per cent from 37.4 per cent.
Consumers’ optimism about the short-term outlook plummeted in December. The percentage of consumers expecting business conditions to improve over the next six months declined to 17.6 per cent from 21.3 per cent, while those expecting business conditions to worsen increased to 21.5 per cent from 15.8 per cent.
Consumers’ outlook for the labour market also turned more pessimistic. Those anticipating more jobs in the months ahead declined to 17.0 per cent from 19.5 per cent, while those expecting fewer jobs increased to 27.3 per cent from 21.2 per cent. The proportion of consumers expecting an increase in their incomes was virtually unchanged at 15.4 per cent. However, those expecting their incomes to decline rose to 18.7 per cent from 15.6 per cent.
ORIGINAL: Minutes away from the December reading of the Conference Board Consumer Confidence index, due out at 10 AM ET.
Economists expect the index to fall to 70.0 from last month’s reading of 73.7.
Last week, University of Michigan Consumer Confidence, a similar indicator, fell to its lowest levels since July.
We will have the release LIVE at 10 AM ET. Click here for updates >