+

Cookies on the Business Insider India website

Business Insider India has updated its Privacy and Cookie policy. We use cookies to ensure that we give you the better experience on our website. If you continue without changing your settings, we\'ll assume that you are happy to receive all cookies on the Business Insider India website. However, you can change your cookie setting at any time by clicking on our Cookie Policy at any time. You can also see our Privacy Policy.

Close
HomeQuizzoneWhatsappShare Flash Reads
 

The Biggest Question About Today's Dive In Consumer Confidence

Jan 29, 2013, 21:31 IST

Consumer confidence declined to 58.6 from 66.7 in December.

Advertisement

That was well below expectations.

So, the question is simple.

What caused it?

Was it the fact that the payroll tax jumped, and people were reacting to their new, lower take-home pay?

Advertisement

Or was it about DC uncertainty?

Nomura writes:

While the cutoff date of the January survey was January 17, the political agreement on the fiscal cliff did not help consumer sentiment improve. Because we think that many households still have not fully realized the impact of the expiration of the payroll tax holiday as yet, there is the possibility that consumer confidence could decline further in the coming months. The Conference Board said “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.”

Here's a chart which shows the dive.

Bloomberg, Business Insider

Advertisement
You are subscribed to notifications!
Looks like you've blocked notifications!
Next Article