Index Down 0.6 Points For Month On Falling Stocks, Greater Economic Uncertainty
According to the latest University of Michigan Index of Consumer Confidence data, in January the index fell to 92 from December’s 92.6 reading. Since January 2015 the overall index was down 6.2%. Looking at the current economic conditions component of the index, in January the reading fell to 106.4 from December’s 108.1, and was down 2.7% from January 2015. The index of consumer expectations component was 82.7 in January, steady from December’s reading and down 9.1% from 12 months earlier. Bloomberg News reported that economists had expected the index to rise to 93, In a statement, the university’s Richard Curtin said, “Consumer confidence has remained largely unchanged,” with the “small downward revisions … due to stock market declines that were reflected in the erosion of household wealth, as well as weakened prospects for the national economy.” According to Bloomberg, the Michigan index “showed American households see slower economic growth being accompanied by slight increases, rather than further declines,” in the unemployment rate at year’s end. The Wall Street Journal asserted that the index appeared to reflect how turmoil in equities markets is weighing on consumers.
What This Means For Small Businesses
Uncertainty about the US economy continues to be a concern for both small businesses and consumers, as the latest consumer confidence data shows. This data mirrors that of the NFIB’s latest Small Business Economic Trends report, which showed 7% fewer small business owners expecting the US economy to improve in December than in November. As NFIB Chief Economist William Dunkelberg said, this negative view is partially driven by a Federal government not attuned to the needs of small businesses. He explained, “In December, Congress made expensing permanent and passed other favorable tax changes that had an immediate impact on bottom lines. However, prospects for any other substantive policy changes in 2016 are not good. Congress has a lot of economic growth supporting legislation under consideration, but most is politically difficult to pass or unlikely to receive Presidential approval.”
CNBC also covered the story.
Note: this article is intended to keep small business owners up on the latest news. It does not necessarily represent the policy stances of NFIB.