A Gauge of Consumer Confidence Hits Five-Month Low

Consumer confidenceBy Martin Crutsinger

WASHINGTON (AP) - Confidence among U.S. consumers has sunk to its lowest point since July, according to a monthly index.

The University of Michigan says its consumer sentiment index for December fell to 72.9, a sharp drop from the November reading of 82.7. The November figure was a five-year high.

Peter Newland, an economist at Barclays (BCS), says consumer confidence has dropped because of uncertainty over whether Congress and the Obama administration will reach a budget deal to avert sharp tax increases and government spending cuts set to take effect in January.

Economists said confidence could fall further if the standoff over the "fiscal cliff" persists into 2013. And Peter Curtin, the University of Michigan's chief economist for the survey, said the loss of public confidence might be slow to recover even if a budget deal is reached early in the new year.

"Confidence is lost much more easily than it can be regained," Curtin said. "Blaming one side or the other for failure will only increase pessimism as it reflects a dysfunctional system for setting economic policy."

Chris Christopher, senior economist at IHS Global Insight, said the survey showed that "Americans have become increasingly worried over their personal finances, business conditions and the economic outlook."

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the elections show idiots agree with obama....they don't see what he is doing and how he lies and cheats and is destroying the country. obama voters just don't read or ask questions i guess.

December 24 2012 at 1:14 AM Report abuse +2 rate up rate down Reply
cut grass

I don't know where those reporters get their info but one day everything is the greatest that ever happen the next day is the lowest it has been in 10 years. I think a bunch of them take turns sitting around a bar at night, come up with these stories and then they rest just follow along.

December 23 2012 at 9:00 PM Report abuse +3 rate up rate down Reply
1 reply to cut grass's comment

I was thinking the same thing. Last week it was all peaches and cream.

December 24 2012 at 6:46 AM Report abuse +1 rate up rate down Reply

I'm a CPA and still don't understand the taxation issue; I am an operational auditor, however, and seldom dealt with taxes, but I am well armed when it comes to economic issues and numbers, in general.

In order to avoid the 'fiscal cliff' the best alternative is a level of $400K or more, based upon 'net taxable income.' A level of $250K is too low, especially in high cost of living areas.....and, we all know where those are. $1 million is too high and would not produce enough revenue to benefit the economy or reduce the national debt. $400K is just about right for a married couple filing jointly and for retirees who make $400K or more, which is very few. Retirees, in that bracket, should also pay taxes on social security income.

Our national income tax return is based upon net taxable income (after reductions to 'gross' for itemized deduction, standard deduction and personal exemptions). That should remain. When I was employed both my employer and I paid 7.75% in social security taxes. Then, it was reduced to 4.2% and is being proposed to increase to 6.2%. I suggest it be raised back to 7.75% in order to protect social security benefits for future retirees. No current retiree should be adversely affected unless falling into the $400K plus income level, as I previously suggested.

Retirees who earn $1,000 per month should not have to pay $104.90 as of January, 2013 for medicare premiums. They should pay less based upon percentiles. No retiree, regardless of income, should pay more than $104.90. High income retirees will automatically pay more in total taxes because $400K would be used as the threshold.

Medicare premiums should rise in concert with the COLA increase. Retirees should not be penalized any amount under the COLA as some have suggested. Cost of fuel should also be added to the COLA.

The $400K figure, in my humble opinion, is the best route to follow. Those earning $400K or more can endure a tax increase quite easily as long as all taxation is based upon 'net taxable income.' The IRS should vigorously address tax loopholes in order to ensure that proper itemized deductions are taken.

December 23 2012 at 7:06 PM Report abuse +2 rate up rate down Reply
1 reply to gamay9's comment

Thank you for injecting some sense and figures into this mess.

December 23 2012 at 11:18 PM Report abuse rate up rate down Reply

This is result of election and to be expected. The president is not a graduate of business school. The idea of a balanced budget is treason to him. A self sustaining government does not include debt, much less increasing debt. Nothing here for business to get exited about, sooner or later we are going to have to rein it in.

December 23 2012 at 6:32 PM Report abuse +5 rate up rate down Reply
Hi Peg and Matt

The left has proved the truth in a statement made over a century ago,"If you divide all of the wealth in the world , equally, among all people, in a short time, the same people that are wealthy today will be so then and the same who are poor today will be so then. "O" still does not understand this fact.

December 23 2012 at 4:48 PM Report abuse +2 rate up rate down Reply

Obama and the Democrats sense a chance to realize their goal destroying wealth building, profit incentive, and the American Dream using it to achieve their vision of "fairness" and economic justice using government to provide for the Democrat base.

Can't have both economic growth and caretaking people in a globalized economy where jobs go to the cheapest cost of doing business with most intelligent labor.

December 23 2012 at 12:52 PM Report abuse +1 rate up rate down Reply

And they didnt want a business person to be the next President.
Cant get hand outs forever.
And the new Bankruptcy laws are not so easy any more easy when you try to walk away from debt.
There are even more houses in foreclousre on my street then before. I dont get it.. I know they trickle down from the bank but boy it does not look any better in my neighborhood.
Happy 2013.

December 23 2012 at 11:56 AM Report abuse -3 rate up rate down Reply

Obama is and will always be a big spender of our tax dollars. only a fool would beleive he is only going after the 2%. he knows there is a lot more he can get from the other 98%. there are many ways the dems will screw all of us over the next four years, if the country can make it 4 more years.

December 23 2012 at 11:17 AM Report abuse +1 rate up rate down Reply

John Boehner and republicans as whole are to blame for low consumer confidence. Republicans behave like little kids. Little kids don't care if other kids eat until they have enough. A big asteroid is coming toward earth. I with this asteroid takes all republicans to the moon – keep them there for a year with little food. Maybe they wise out when they return to earth.

December 23 2012 at 8:10 AM Report abuse -1 rate up rate down Reply

Even Dale Carnegie achieved his success by cheating the workforce. The more they trash the unions and leave people unemployed the more the people realize they need the unions to protect them from the abusers of the work force and more laws to protect people.

December 23 2012 at 5:38 AM Report abuse +1 rate up rate down Reply
1 reply to Iselin007's comment

The more people find out how the union's greed has screwed up this country these last 40-50 years,the more they realize that they are much better off without them. Union are the biggest cause of the loss of jobs to other countries. And I say that after watching the damages unions have caused over the last 80+ years of my life.

December 23 2012 at 3:11 PM Report abuse +1 rate up rate down Reply