WASHINGTON (AP) — 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 today that its consumer confidence index dropped 8.1 points in January from December to a reading of 58.6, the lowest since November 2011.
The index has declined for three straight months since hitting a nearly five-year high of 73.1 in October 2012. It's still above the post-recession low of 40.9 reached in October 2011.
Conference Board economist Lynn Franco said the tax increase was the key reason confidence tumbled in January, making Americans less optimistic about the next six months.
For a worker earning $50,000 a year, take-home pay will shrink this year by about $1,000.
"It may take a while for confidence to rebound and consumers to recover from their initial paycheck shock," Franco said.