Consumers are nervous about their skin in the game
by digby
Dropping past analysts’ expectations, a gauge of consumer confidence fell this month to its lowest level in more than a year, led by gloomier expectations and views of the present situation, according to data released Tuesday.
The Conference Board reported that its gauge of consumer confidence dropped to 58.6 in January, the lowest level since November 2011.
“Consumers are more pessimistic about the economic outlook and, in particular, their financial situation,” said Lynn Franco, economic indicators director at the Conference Board. “The increase in the payroll tax has undoubtedly dampened consumers’ spirits and it may take a while for confidence to rebound and consumers to recover from their initial paycheck shock.”
Analysts polled by MarketWatch had expected a January reading of 64.3, compared with an initial December estimate of 65.1, reasoning that higher payroll taxes and fiscal uncertainties would more than offset recent positive news on the labor market. See economic calendar. On Tuesday, the Conference Board revised December’s level to 66.7.
Generally when the economy is growing at a good clip, confidence readings are at least 90.
I think the idea was that they would be so thrilled that people over 450k a year were paying slightly more in taxes that they wouldn’t mind having their own meager checks slashed as well. You know, because all we really care about is that millionaires have some “skin in the game.” True they only have a hangnail while the rest of us are thoroughly flayed, but it’s the thought that counts. It sounds as though consumers are more worried about their own paychecks getting smaller than they are about a “balanced approach” to deficit reduction.
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