U.S. consumer confidence drops in January

Consumer confidence decreased in January as consumers remained concerned about business conditions and income prospects, according to The Conference Board.

The Conference Board's Consumer Confidence Index decreased to 61.1 in January from 64.8 in December 2011. A reading of 90 or higher indicates a healthy economy.

The index measures how shoppers feel about business conditions, the job market and the next six months. Economists watch the index closely because consumer spending accounts for about 70 percent of economic activity and is a crucial part of a strong rebound.

Those expecting business conditions to improve during the next six months fell to 16.6 percent from 16.8 percent, and those expecting business conditions to worsen increased from 13.4 percent to 15.1 percent.

However, 16.2 percent expect more jobs during the next six months compared with 14 percent in December 2011, and those expecting fewer jobs dropped from 20.2 percent to 19.5 percent.

"Consumer confidence retreated in January after large back-to-back gains during the final two months of 2011," says Lynn Franco, director of The Conference Board Consumer Research Center. "Consumers' assessment of current business and labor market conditions turned more downbeat and is back to November 2011 levels. Regarding the short-term outlook, consumers are more upbeat about employment but less optimistic about business conditions and their income prospects. Recent increases in gasoline prices may have consumers feeling a little less confident this month."

Date : 2/10/2012