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Consumer Confidence falls to lowest level in 14 months

NEW YORK - Consumer confidence took another sharp drop in January as the closely watched Consumer Confidence Index fell more than eight points and erased all of its 2012 gains.

The Conference Board, which conducts the monthly surveys of consumers, said the January index stood at 58.6 (1985=100), down from 66.7 in December.

The index was consistently in the 60s and 70s throughout 2012, and hadn't been in the 50s since it hit 55.2 in November 2011.

"Consumers are more pessimistic about the economic outlook and, in particular, their financial situation," said Lynn Franco, director of economic indicators at The Conference Board. "The increase in the payroll tax has undoubtedly dampened consumers' spirits and it may take a while for confidence to rebound and consumers to recover from their initial paycheck shock."

The survey also showed that consumers' appraisal of current conditions deteriorated in January. Those describing business conditions as "good" fell to 16.7% from 17.2%, while those describing business conditions as "bad" rose to 27.4% from 26.3%.

In addition, those saying jobs are "plentiful" declined to 8.6% from 10.8%, while those claiming jobs are "hard to get" increased to 37.7% from 36.1%.

Survey respondents also were less optimistic about the short-term outlook than previous months. Those expecting business conditions to improve over the next six months declined to 15.4% from 18.1%. However, those expecting conditions to worsen declined slightly to 20.6% to 21.1%.

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