Tuesday, July 22nd17.6°C
21452
21953

US consumer confidence drops

U.S. consumer confidence plunged in January to its lowest level in more than a year, reflecting higher Social Security taxes that left Americans with less take-home pay.

The Conference Board said Tuesday that its consumer confidence index dropped to 58.6 in January. That's down from a reading of 66.7 in December and the lowest since November 2011.

Conference Board economist Lynn Franco said the tax increase was a key reason confidence tumbled and made Americans less optimistic about the next six months.

Congress and the White House reached a deal on Jan. 1 to prevent income taxes from rising on most Americans. But they allowed a temporary cut in Social Security taxes to expire. For a worker earning $50,000 a year, take-home pay will shrink this year by about $1,000.

The survey was conducted through Jan. 17, at which point most people began to realize their paychecks were lighter.

Taxes are rising at a time when wages and salaries are barely growing. The combination is expected to hurt consumer spending and slow economic growth.

Many economists predict economic growth slowed in the October-December quarter to an annual rate of around 1 per cent. That would be much weaker that the 3.1 per cent rate in the July-September quarter. Most economists don't expect growth to pick up much in the first quarter of 2013.

The decline in confidence comes as the economy is signalling improvement elsewhere.

A recovery in housing market is looking more sustainable and is expected to strength this year.

Auto sales reached a five-year high of 14.5 million in 2012. Analysts expect sales will climb even higher this year, to 15.5 million.

Stocks are also near their all-time highs. The Standard and Poor's 500 has more than doubled from its low in 2009 and is just 4 per cent shy of its record high set in 2007.

Still, the job market remains sluggish. Employers have added an average of about 150,000 jobs a month for the past two years. That's enough for a gradual decline in the unemployment rate, which remains high at 7.8 per cent.

The Canadian Press


Read more Business News




Recent Trending




Today's Market
S&P TSX15322.23+72.24
S&P CDNX1007.951.47
DJIA17113.5161.78
Nasdaq4458.704+34.00
S&P 5001984.24+10.61
CDN Dollar0.9306-0.0006
Gold1313.40+4.2001
Oil104.29-0.30
Lumber332.40+6.10
Natural Gas3.823-0.026

 
Okanagan Companies
Pacific Safety0.185-0.015
Knighthawk0.01-0.005
QHR Technologies Inc1.150.00
Cantex0.055-0.005
Anavex Life Sciences0.34-0.008
Metalex Ventures0.07+0.005
Russel Metals35.28+0.29
Copper Mountain Mining2.78+0.09
Colorado Resources0.20-0.005
ReliaBrand Inc0.10+0.019
Sunrise Resources Ltd0.025-0.005
Mission Ready Services0.18-0.03

 



22567

FEATURED Property
193656912-1940 Nancee Way
2 bedrooms 2 baths
$89,000
more details
image2image2image2
Click here to feature your property
Please wait... loading


Labour shortage in BC

The mainstream media are finally waking up to something unusual in British Columbia – a labour shortage. If the experience of Alberta is a guide to our own future, the highly skilled labour will...


Learn to delegate effectively

Photo: ContributedI have the pleasure of witnessing people delegate tasks quite often. Sometimes with tremendous success and sometimes with disastrous consequences. I have chaired a lot of committees...


Euro debt woes re-emerge

Big Picture Euro debt woes re-emerge Europe’s debt woes jumped back into the headlines this week trumping other economic, geopolitical and corporate developments. Word that one of Portugal&rsquo...

_








Member of BC Press Council


22685