Executive Briefing - Friday

ECONOMY

Consumer Mood Fizzles In January

A survey says a modest uptick in consumer confidence in December was short-lived.

The Conference's Board's Consumer Confidence Index slipped to 87.9 in January, down from 90.6 in December. The monthly survey is based on a sample of 5,000 U.S. households.

The research group says consumer views of current business conditions are getting more negative. Their assessment of the job market is also more downbeat than it was a year ago.

Hard percentages underscored the downward shift in consumer sentiment. Those claiming that business conditions are bad rose to 20% in January from 18.8% in December. Those claiming business conditions are good fell to 20.7% from 21.2%.

Consumer views of the job market were somewhat more positive. The percentage of consumers saying jobs are "hard to get" eased to 20.1% from 22.7%, while those claiming jobs are "plentiful" edged up to 23.9% from 23.6% in December.

Looking ahead, the Conference Board says consumers are quite downbeat about the short-term future and a greater proportion expect business conditions and employment to slip more in the months ahead. Also, the number of consumers anticipating an improvement in their earnings has dropped, and that could potentially influence spending decisions.

The number of consumers expecting business conditions to worsen over the next six months rose to 16% from 14.1%, while those expecting business conditions to improve dropped to 11.6% from 13.8%.

EMPLOYEES

Beware Regulating Worker Behavior

Employers who refuse to hire smokers or charge overweight workers more for health insurance should think twice.

Law firm Pepper Hamilton says such companies may be overstepping the bounds of individual privacy.

Susan Lessack, a partner at Pepper Hamilton, says more employers believe that the health insurance claims of smokers and overweight workers are higher than those for nonsmokers and non-overweight employees and want them to contribute more for coverage.

While motivated by valid economic concerns, Lessack says such practices pose legal risks. She notes that some states have a "lifestyle" statute that bans imposing higher health premiums on employees based on lifestyle choices.

"In a state without a lifestyle statute, employers have more freedom to take action based on off-duty conduct by workers," Lessack said. "This is particularly true when employers have job-related reasons for their actions, such as when there's a connection between employees' personal habits and their workplace effectiveness."

In addition to the privacy issues raised by these practices, the risk exists that smokers or obese workers who are treated adversely might have viable claims for disabilities or perceived disability discrimination.