US consumer confidence slips in January, Conference Board says

A widely-followed barometre of US consumer confidence cooled at the turn of the year, as expectations were downgraded.

The Conference Board institute's index retreated from 113.3 in December to 111.8 in January.

Economists had projected a reading of 112.8.

In parallel, a subindex of consumers' expectations slipped from 106.4 to 99.8 even as another linked to consumer's perception of the present situation rose from 123.5 to 129.7.

"Consumer confidence decreased in January, after reaching a 15-year high in December (Aug. 2001, 114.0)," said Lynn Franco, Director of Economic Indicators at The Conference Board.

"The decline in confidence was driven solely by a less optimistic outlook for business conditions, jobs, and especially consumers’ income prospects. 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."

Regarding the short-term outlook, the proportion of consumers expecting business conditions to deteriorate increased from 8.9% to 10.7%.

Meanwhile, the percentage of those who expected increased incomes fellback from 21.5% to 18.0%.

"The small decline in the Conference Board measure of consumer confidence in January brings the index a little closer in line with other measures of confidence, and still leaves it consistent with stronger real consumption growth in the first quarter," said Andrew Hunter, US economist at Capital Economics.