Conference Board: Consumer Confidence Crashes in January

Consumer confidence took another dive in January as Americans saw their paychecks shrink, ""The Conference Board"":http://www.conference-board.org/ reported Tuesday.

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The research firm's Consumer Confidence Index--based on a survey conducted by Nielsen--fell to 58.6 in January, down from 66.7 at the end of 2012.

""Consumer Confidence posted another sharp decline in January, erasing all of the gains made through 2012. Consumers are more pessimistic about the economic outlook and, in particular, their financial situation,"" explained Lynn Franco, director of economic indicators 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.""

Both components of the overall index showed dwindling optimism among consumers. The Expectations Index declined from 68.1 from 59.5 in January, while the Present Situation Index fell from 64.6 to 57.3.

According to the survey results, those claiming business conditions are ""good"" declined half a percentage point to 16.7, while those stating business conditions are ""bad"" increased nearly 1 percentage point to 26.3 percent. Assessment of the labor market also grew more negative, with the percentage of those saying jobs are ""plentiful"" falling to 8.6 percent and the percentage claiming jobs are ""hard to get"" increasing to 37.7 percent.

Meanwhile, the short-term outlook was no better. Those expecting business conditions to improve over the next six months declined to 15.4 percent from 18.1 percent. However, the number of respondents expecting business conditions to deteriorate further also fell, dropping to 20.6 percent from 21.1 percent previously.

Outlook for the labor market was also pessimistic: Those anticipating more jobs in the coming months declined to 14.3 percent from 17.9 percent, while those expecting few jobs remained more or less flat at 27 percent. The proportion of consumers expecting their incomes to decline rose to 22.9 percent from 19.1 percent, while the share of those expecting their incomes to rise dropped 2 percentage points to 13.6 percent.