Fiscal Cliff Drives Down Consumer Confidence Dec 27, 2012

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The Conference Board's Consumer Confidence Index dropped for a second month in December 2012 as consumer anxiety increased over the looming fiscal cliff. The Index, which was 71.5 in November, dropped to 65.1 in December.

The Expectations Index, one of the components of the overall Consumer Confidence Index, dropped from 80.9 in November to 66.5. Another component, the Present Situation Index, went from 57.4 last month to 62.8 in December.

"The sudden turnaround in expectations was most likely caused by uncertainty surrounding the oncoming fiscal cliff," said Lynn Franco, Director of Economic Indicators at The Conference Board. "A similar decline in expectations was experienced in August of 2011 during the debt ceiling discussions."

She added, however: "While consumers are quite negative about the short-term outlook, they are more upbeat than last month about current business and labor market conditions."

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