US consumer confidence falls from November high

WASHINGTON • US consumer confidence dampened in December, retreating from a 17-year high in November as optimism about the short-term outlook fell sharply, according to a closely-watched monthly survey.

While sentiment about current conditions were more positive than last month, consumers were more pessimistic about the situation for business and jobs six months out, the Conference Board reported on Wednesday.

The consumer confidence index fell to 122.1 from 128.6 last month, which was revised down from the originally reported 129.5, but still was the highest since 2000.

The high confidence last month matched reports of solid sales in the holiday shopping season.

"The decline in confidence was fuelled by a somewhat less optimistic outlook for business and job prospects in the coming months," said Ms Lynn Franco, head of indicators at the Conference Board, which produces the survey, in a statement. "Despite the decline in confidence, consumers' expectations remain at historically strong levels, suggesting economic growth will continue well into 2018," she said.

Consumers' feelings about present-day conditions were slightly more positive this month, as the percentage saying business conditions are "good" rose marginally to 35.2 per cent, while those saying business conditions are "bad" slipped to 12.1 per cent.

However, optimism about the short-term outlook declined sharply, as those anticipating business conditions will improve over the next six months declined to 20.2 percent from 23.1 per cent, while those expecting business conditions to worsen increased to 9.2 per cent from 6.7 per cent.

The outlook for the job market also was less upbeat than in November.

The proportion expecting more jobs in the months ahead decreased to 18.4 per cent from 21.3 per cent, while those anticipating fewer jobs rose to 16.3 per cent from 12.1 per cent.

Analysts agreed with Ms Franco that the December fall should not detract from high levels of optimism, even though the consensus forecast expected a modest slide in the headline index to 128.0.

IHS Markit's James Bohnaker said some of the drop could be due to uncertainty about the massive tax reform passed by Congress on Dec 20.

The cut-off date for the Conference Board survey was Dec 15. "Consumer Confidence fell dramatically in December, but the details show that there is no fundamental reason to be concerned about confidence," Mr Bohnaker said in a note.

AGENCE FRANCE-PRESSE

A version of this article appeared in the print edition of The Straits Times on December 29, 2017, with the headline 'US consumer confidence falls from November high'. Print Edition | Subscribe