Consumers are less confident in the economy at the start of 2017, according to the Consumer Confidence Survey conducted by The Conference Board by Nielsen, a provider of information and analytics around what consumers buy and watch.
The Consumer Confidence Index decreased in January to 111.8, down from 113.3 in December. The Present Situation Index, however, increased from 123.5 to 129.7 in January. The Expectations Index decreased from 106.4 in December to 99.8 this month.
In 1985, the index was set to 100, representing the index’s benchmark. This value is adjusted monthly based on results of a household survey of consumers’ opinions on current conditions and future economic expectations. Opinions on current conditions make up 40% of the index, while expectations of future conditions make up 60%.
“Consumer confidence decreased in January, after reaching a 15-year high in December,” said Lynn Franco, The Conference Board director of economic indicators. “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,” Franco said. “Despite the retreat in confidence, consumers remain confident that the economy will continue to expand in the coming months.”
But other measures of consumer confidence show that consumers are getting even more confident in January. In fact, the Index of Consumer Sentiment increased to its highest level in 12 years in January, according to the Survey of Consumers conducted by the University of Michigan.
Consumers were more optimistic about current conditions in January. Those saying business conditions are good increased from 28.6% to 29.3%, while those who say business conditions are bad decreased from 17.8% to 16.1% for the month.
Consumers were more positive about the labor market with those saying jobs are plentiful increasing from 26% to 27.4%. Similarly, those saying jobs are hard to get decreased from 22.7% to 21.5%.
On the other hand, consumers’ short-term outlook decreased last month. Those saying business conditions will improve over the next six months decreased from 24.7% to 24.1%, while those expecting business conditions will worsen increased from 8.9%to 10.7%.
Their outlook for the labor market is mixed as those expecting more jobs in the months ahead decreased from 21.7% to 19.8%, while those who are expecting fewer jobs remained unchanged at 14%. Those who expect their incomes to increase declined from 21.5% to 18%, and those who expect a decrease rose from 8.6% to 9.6%.