NEW YORK -- Consumer confidence fell in January for the second straight month, largely because Americans feel less optimistic about the future job situation and prospects for pay raises, a private research group reported Tuesday.
The study was supported locally by people who chose to respond to The Brazil Times online poll. Slightly more than half the respondents said they were pessimistic about the economy this year.
The Times poll is unscientific and does not necessarily represent a cross-section of readers.
The New York-based Conference Board said its Consumer Confidence Index dropped to 79 from a revised 80.7 in December. Analysts had been expecting a bigger decline in the index to a reading of 78.5 for January.
"Overall readings continue to reflect the country's lackluster economic activity," said Lynn Franco, director of the Conference Board's Consumer Research Center. "Now, with the threat of war looming, consumers have grown increasingly cautious about the short-term outlook."
January marks the second consecutive decline for the Consumer Confidence Index, which has ticked up only once -- in November -- following a five-month-long summer decline. Since May, when the index stood at 110.3, it has continued on a downward spiral.
In the latest survey, the Conference Board found the share of consumers expecting fewer jobs in the coming months rose to 20.9 percent in January from 20.2 percent in December. Those who think the job market will improve declined to 14.3 percent from 15.4 percent.
Americans are also less optimistic about making more money. The percentage of those surveyed anticipating an increase in their incomes dropped to 18.4 percent from 19.6 percent a month before.
The Conference Board said consumers' expectations for the next six months are also lower, compared with how they felt at the end of 2002.
Those expecting the economy to perform worse in the first half of this year rose to 14 percent from 11 percent in December, while the percentage of people anticipating an improvement in business conditions dropped to 17.7 percent in January from 21.2 percent in December.
The Conference Board's index is based on a monthly survey of some 5,000 U.S. households. Wall Street closely follows the index because consumer confidence drives consumer spending, which accounts for about two-thirds of the nation's economic activity. The index compares results to its base year, 1985, when it stood at 100.
Also Tuesday, the government reported that new home sales hit a record high in December to close out the best year ever as the lowest interest rates in decades enticed home buyers, even in a frail economy. The report came a day after a report that sales of previously owned homes also set a record in 2002.
On Wall Street, stocks rose moderately as the market digested the news. The Dow Jones industrial average gained 80 points to 8,070 in morning trading, while the Nasdaq composite index gained 9 points to 1,334.
Though consumers grew less confident about the job outlook in the coming months, their assessment of current employment conditions improved, the Conference Board report said. Its Present Situation Index improved to 75.4 percent from 69.6 percent last month.
Consumers reporting "jobs hard to get" dropped to 28.8 percent from 29.7 percent. And those surveyed who said "jobs are plentiful" popped to 14.5 percent from 12.3 percent.
Those rating current business conditions as "good" increased to 15 percent from 14.5 percent, while those with the opposite view edged up to 26.5 percent from 25.9 percent.
-- -- --
On the Net:
The Brazil Times:
Times Editor Frank Phillips contributed to this report.