Though near-term expectations for the U.S. economy seem to be relatively positive among consumers nationwide, the long-term outlook doesn’t seem to be bright, as sentiment among people across the country dwindled in the final month of 2012.
The Conference Board’s Consumer Confidence Index decreased on a monthly basis in December, falling to 65.1. In November, that figure was 71.5, indicating a marked dip.
Two separate sub-indices showed different viewpoints among consumers. The Board’s Expectations Index, which indicates how strong or weak consumers think the economy will be in the months ahead, slipped from a reading of 80.9 to 66.5 month-to-month. Conversely, though, the Present Situation Index, which indicates how consumers feel about short-term conditions, rose from 57.4 to 62.8.
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“Consumers’ expectations retreated sharply in December resulting in a decline in the overall Index,” said Lynn Franco, director of economic indicators for The Conference Board. “The sudden turnaround in expectations was most likely caused by uncertainty surrounding the oncoming fiscal cliff. A similar decline in expectations was experienced in August of 2011 during the debt ceiling discussions.”
Despite a poor short-term forecast for the economy, she added that many consumers have shown minor optimism for the start of the new year, given recent job reports in the last few months of 2012.
With a number of employers throughout the country stating they plan to grow their workforces in 2013, it may be little wonder why numerous consumers think the economy is headed in the right direction.
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According to CareerBuilder.com’s job forecast report for 2013, one in four hiring managers surveyed said they plan to hire more workers during the 12-month period — news that may lead to better personal finances and, in turn, credit scores for workers nationwide.
“More than 60 percent of employers reported that they are in a better financial position than last year and more than 40 percent said their sales increased over the last six months,” said Matt Ferguson, CEO of CareerBuilder. “While this bodes well for job creation, employers are still assessing the implications of a weakened global market and a modest recovery at home.”
Image: striatic, via Flickr