Consumer confidence drops in the Bay State, Mass Insight says

Consumer confidence in Massachusetts fell sharply in January as the state’s residents fretted about jobs and stagnant incomes, according to a survey by a Boston consulting and research firm.

Mass Insight said that its quarterly consumer confidence index fell to 82 in January from 91 in October and from 84 in January 2012.

William H. Guenther, chief executive of Mass Insight, attributed much of the decline to a still-weak job market.


Nearly half of those surveyed viewed jobs as scarce, and one in four said that either they or someone in their household been involuntarily unemployed in the previous month, according to Mass Insight.

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“The ongoing uncertainty about the availability of jobs coupled with stagnant income levels continues to unsettle Massachusetts residents,” Guenther said in a statement.

The drop in consumer confidence in Massachusetts reflects a decline nationally.

The Conference Board, a private research group in New York City, reported that its monthly US consumer confidence index fell in January to 58.6 from 66.7 in December.

US consumers had a pessimistic outlook on the economy and their own finances, which the Conference Board blamed in part on the recent payroll tax increase, which is taking small but noticeable amounts from paychecks. Consumers’ views of the job market also deteriorated, with those expecting more jobs in coming months declining to 14.3 percent in January, from 17.9 percent in December.


The state and the nation have seen little progress in reducing the unemployment rate in recent months. The US unemployment has hovered just below 8 percent since September, while the Massachusetts rate has risen to 6.7 percent, from 6.5 percent in September.

Both the US and Massachusetts economies slowed at the end of year, which many economists blamed on uncertainty over the financial crisis in Europe and the political crisis in Washington, when lawmakers debated the combination of tax increases and budget cuts known as the fiscal cliff. Congress resolved the tax issues, but deep budget cuts that could undermine the economic recovery still loom.

The US economy contracted slightly in the last three months of last year, in large part because of steep drops in government spending, the Commerce Department reported recently.

The Massachusetts economy grew at an anemic 1 percent annual rate during the same period, according to the University of Massachusetts.

Mass Insight has taken consumer confidence readings every three months for the past two decades. The index, calculated on a scale of zero to 200, hit a high of 136 in January 2000 and a low of 38 in January 2009.