Consumer confidence slides from ‘cliff’

Consumer confidence is continuing to slide as the threat of the “fiscal cliff” draws near with little sign of progress from policymakers.

The benchmark Conference Board Consumer Confidence Index posted its second straight month of decline in December, and consumer expectations have fallen “sharply.” 

Consumer confidence now stands at 65.1, down from 71.5 in November; a score of 100 represents the optimistic economic outlook of 1985. And the expectations index now pegs consumer outlook at 66.5, down from 80.9 just one month ago.

{mosads}Those behind the index believe much of it is tied to ongoing uncertainty and pessimism surrounding the automatic spending cuts and expiring tax breaks that make up the fiscal cliff.

“The sudden turnaround in expectations was most likely caused by uncertainty surrounding the oncoming fiscal cliff,” said Lynn Franco, director of economic indicators at The Conference Board. “A similar decline in expectations was experienced in August of 2011 during the debt ceiling discussions.”

The new data comes as Washington policymakers seem to be making zero headway on avoiding the confluence of policies making up the cliff, which economic experts warn could push the nation into a recession if allowed to take effect in 2013. 

Senate lawmakers have returned to Washington after the Christmas holiday, but Senate Majority Leader Harry Reid (D-Nev.) opened the work period on a pessimistic note. He criticized Speaker John Boehner (R-Ohio) for failing to give members of his chamber the 48-hour notice to return to Washington yet, accusing him of being more interested in protecting his role as Speaker than resolving the situation.

“I have to be honest, I don’t know, time-wise, how it can happen now,” Reid said of striking a deal before Jan. 1. “[Boehner] should call them back today — he shouldn’t have let them go, in fact.”

Boehner sent House lawmakers home one week ago after he failed to garner enough GOP support to pass his alternative tax plan. He now has said it is up to Senate Democrats to come up with a compromise, and vowed Wednesday that the House would at least consider whatever measure emerges.

A Boehner spokesman was sharply critical of Reid’s remarks on the Senate floor Thursday, saying he should “talk less and legislate more.”

President Obama spoke with leaders of both parties in the House and Senate Wednesday as he flew back to Washington from Hawaii.