| Click for the Finfacts Ireland Portal Homepage |

Finfacts Business News Centre

 Irish Economy
 EU Economy
 US Economy
 UK Economy
 Global Economy
 Asia Economy


How to use our RSS feed

Follow Finfacts on Twitter

Web Finfacts

See Search Box lower down this column for searches of Finfacts news pages. Where there may be the odd special character missing from an older page, it's a problem that developed when Interactive Tools upgraded to a new content management system.


Finfacts is Ireland's leading business information site and you are in its business news section.


Finfacts Homepage

Irish Share Prices

Euribor Daily Rates

Irish Economy

Global Income Per Capita

Global Cost of Living

Irish Tax - Income/Corporate

Global News

Bloomberg News

CNN Money

Cnet Tech News


Irish Independent

Irish Times

Irish Examiner

New York Times

Financial Times

Technology News




Content Management by interactivetools.com.

News : US Economy Last Updated: Dec 28, 2012 - 5:50 AM

US consumer confidence dips on fiscal cliff fears; Sales of new houses rise
By Finfacts Team
Dec 28, 2012 - 5:44 AM

Email this article
 Printer friendly page

US consumer confidence which had declined slightly in November, posted another dip in December as a polarised Congress struggles to agree on tax rises and spending cuts ahead of a January 01, 2013 deadline known as the fiscal cliff, when big automatic tax rises and spending cuts will be triggered if there is no agreement. Meanwhile, it was also reported on Thursday that new house sales rose in November and weekly jobless benefits claims fell last week.

There’s “a massive fiscal cliff” in America's future, Ben Bernanke, the Fed chairman, told the House Financial Services Committee of Congress last February.

“Under current law, on January 01, 2013, there’s going to be a massive fiscal cliff of large spending cuts and tax increases,” he said in reference to the expiring Bush tax cuts and spending reduction, set in motion by last year’s debt ceiling deal. “I hope that Congress will look at that and figure out ways to achieve the same long-run fiscal improvement without having it all happen at one date.”

If Congress and President Obama cannot agree on a deal to cut the deficit by Monday, more than $500bn in tax rises and spending cuts are set to take effect immediately.

The president has proposed that Bush-era tax cuts on incomes over $250,000 expire while many Republicans oppose any rise in taxes and demand deeper spending cuts on health and retirement programmes.

To add to a confused picture, the Republican-leaning 'Red' states are the biggest per capita beneficiaries of federal transfers while the national debt more than doubled under George W. Bush, the last Republican president.

Last year The New York Times produced a chart which illustrates how much of the federal debt accumulated under each president since 1981.

According to the chart, the Bush administration began with a $5.8tn gross federal debt, which expanded by $6.1tn to reach $11.9tn by January 2009 --  a rise of 105%, or slightly more than double. The newspaper said the rise in debt resulted from "tax cuts, the wars in Iraq and Afghanistan, (the) economic downturn in 2001 and recession starting in 2007," (Adjusted for inflation (to 2011 dollars), the increase was 88%).

See Wall Street Journal video below for more on the fiscal cliff.

The consumer confidence index now stands at 65.1 (1985=100), down from 71.5 in November. The Expectations Index declined sharply to 66.5 from 80.9. The Present Situation Index increased to 62.8 from 57.4 last month.

Lynn Franco, director of economic indicators at the Conference Board, a private New York-based research firm said on Thursday: “Consumers’ expectations retreated sharply in December resulting in a decline in the overall Index. The sudden turnaround in expectations was most likely caused by uncertainty surrounding the oncoming fiscal cliff. A similar decline in expectations was experienced in August of 2011 during the debt ceiling discussions. While consumers are quite negative about the short-term outlook, they are more upbeat than last month about current business and labor market conditions.” 

Consumers’ assessment of current conditions improved in December. Those stating business conditions are “good” rose to 17.1% from 14.6%, while those stating business conditions are “bad” decreased to 27.3% from 31.2%. Consumers’ appraisal of the labor market was mixed. Those saying jobs are “plentiful” edged down to 10.3% from 11.0%, while those saying jobs are “hard to get” declined to 35.6% from 37.4%.

Consumers’ optimism about the short-term outlook plummeted in December. The percentage of consumers expecting business conditions to improve over the next six months declined to 17.6% from 21.3%, while those expecting business conditions to worsen increased to 21.5% from 15.8%.

The Census Bureau reported that sales of new single-family houses in November 2012 were at a seasonally adjusted annual rate of 377,000 - - the highest level since April 2010. This is 4.4% above the revised October rate of 361,000 and is 15.3% above the November 2011 estimate of 327,000.

The median sales price of new houses sold in November 2012 was $246,200; the average sales price was $299,700. The seasonally adjusted estimate of new houses for sale at the end of November was 149,000. This represents a supply of 4.7 months at the current sales rate.

Meanwhile, the Department of Labor reported that the number of Americans filing first-time claims for jobless benefits fell by 12,000 last week to a seasonally adjusted 350,000. That is the third-lowest level of the year, though it was unclear whether seasonal hiring distorted the numbers.

Everything You Need to Know About the Fiscal Cliff  --  Wall Street Journal

Check out our subscription service, Finfacts Premium , at a low annual charge of €25 - - if you are a regular user of Finfacts, 50 euro cent a week is hardly a huge ask to support the service.

Related Articles
Related Articles

© Copyright 2011 by Finfacts.com

Top of Page

US Economy
Latest Headlines
US jobs rose by 215,000 in July; Unemployment rate stable at 5.3%
US economy grew at weak pace in Q2 2015 - Worst expansion since 1945
Decoupling of per capita GDP, productivity, private employment, and median family income in America
US economy stumbles again in 2015
Income gap highest in 30 years; No inequality rise in best-paying US firms
Fed minutes raise doubts about fragility of US recovery
Senate Democrats block trade deal authority for Obama
Five firms held 25% of top US non-financial companies cash pile in 2014
US added 223,000 jobs in April; Broad jobless rate at 10.8%
Investment struggles as dividends/ share buybacks at top US firms to exceed $1tn in 2015
US economic growth plunged in Q1 2015
Why the Fed may (almost) never raise interest rates
US jobless rate falls to 5.5%; Broad rate at 11%; Participation rate at 1978 level
US added 257,000 jobs in January; Broad jobless rate at 11.3%
US economy will soon see best years in a decade
US annualised GDP slowed sharply in final quarter 2014
US budget deficit to fall to 2.6% of GDP in 2015
US added 252,000 jobs in December; Jobless rate falls to 5.6%
US adds 321,000 jobs in November; Private sector adds 10.9m jobs in 57 months of growth
US manufacturing slowed in November
US retail spending over Thanksgiving weekend fell 11%
US consumer spending weak in October; Business investment fell again
US third-quarter GDP revised up to 3.9% annualised rate
After destroying banking secrecy US helps Swiss exporters
US oil imports from OPEC cartel at 30-year low
Tax-inverted "Irish" firm Actavis agrees to buy US Botox maker Allergan
US nonfarm payroll employment rose 214,000 in October' Jobless @ 6-year low
Swiss bankers await fallout of US tax evasion acquittal
Two PMI reports give contrasting trends on US manufacturing
US GDP increased at annualised 3.5% in third quarter of 2014
US city home price growth slowed again in August; Consumer confidence rebounded in September
US new orders for manufactured durable goods fell again in September
Loans to buy US shares at record highs
Global markets slide; US industrial production best in 3 years & jobless claims in 14-year low
US federal budget deficit dips to 2.9% of GDP in fiscal year 2014
US added 248,000 jobs in September; Jobless rate falls to 5.9%
US set to become world’s leading liquid petroleum producer again
Obama issues new rules to combat tax inversions
US Securities and Exchange Commission to pay $30m award to foreign whistleblower
Typical American household income in 2013 was below the 1989 level