Consumers were slightly less optimistic this month, according to the Conference Board’s Consumer Confidence Index. The overall index fell from 64.8 in December to 61.1 in January. The leading driver of this decline was a diminishment in people’s perception of the current economic environment, with the index for present conditions down from 46.5 to 38.4. This is essentially where the index stood in November, essentially erasing the improvements observed in December. Nonetheless, individual assessments of future conditions remained about the same, down to 76.2 from 77.0.
This index rises and falls with pocketbook issues, and in this survey, Americans felt that jobs were harder to get. Also, fewer of them anticipated increases in their incomes. The result was a decrease in the percent planning to purchase a home, automobile or major appliance.
Lynn Franco, the Director of The Conference Board Consumer Research Center, cites one other factor which might be providing a drag to these numbers. In the press release she says, “Recent increases in gasoline prices may have consumers feeling a little less confident this month.” Indeed, there is a long history of consumer confidence being shifted by the price that Americans pay at the gas pump.
For manufacturers, this is obviously not a positive way to enter the new year. We need the consumer to pick up their spending, helping to drive more demand for our goods. While over sentiment is much-improved from the lows seen in late summer and early fall, there is still much work to do to get the public less anxious about the economy.
Chad Moutray is chief economist, National Association of Manufacturers