Consumer confidence tumbles in December
Washington, D.C. -- A report issued Thursday by the Conference Board said that its consumer confidence index fell sharply in December to 65.1 from 75.1 in November, impacted by fears of tax increases and impending government spending cuts.
The fall in confidence is the second straight decline and the lowest level since August.
The survey showed that consumers are slightly more optimistic about current business conditions and hiring. But their outlook for the next six months deteriorated to its lowest level since 2011.
Lynn Franco, the board's director of economic indicators, said the decline in expectations for the next six months is a signal that consumers are worried about the "fiscal cliff.”
A separate survey released earlier by the University of Michigan showed consumer confidence fell in December to a five-month low.
The December drop in confidence "is obvious confirmation that a sudden and serious deterioration in hopes for the future took place in December — presumably reflecting concern about imminent 'fiscal cliff' tax increases," Pierre Ellis, economist with Decision Economics, wrote in a note to clients.
The Conference Board index has risen from an all-time low of 25.3 touched in February 2009. It remains well below the level of 90 that is consistent with a healthy economy. It last reached that point in December 2007.