U.S. Consumer Confidence Sinks to Record Low Amid More Bad News for the Economy
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Consumer confidence hit its lowest point since 1967, according to The Conference Board,
Index of Consumer Confidence, which began collecting data that year.
The Index stood at 25 in February, down from 37.4 in January.
"Just when you think confidence can't go any lower, the bottom falls out of it, and you can be sure the rest of the economy is not far behind," said Chris Rupkey, chief financial economist at Bank of Tokyo-Mitsubishi UFJ Ltd. in New York, Bloomberg.com
reported. "If consumers' spending matches their flagging spirits, this recession is going longer and deeper," Rupkey added.
The economy continues to suffer on many fronts. Forbes.com
reported that home prices in 20 metropolitan areas fell 18.5% in December versus the previous year, according to the S&P/Case-Shiller U.S. National Home Price Index. It was the largest drop since the survey began in 2001.
Auto sales were down in January, too, said Bloomberg.com. Sales of cars and light trucks were at a 9.6 million annual rate, the lowest level since 1982, according to industry data.
The Conference Board Index of Consumer Confidence fell in all categories. The Present Situation Index dropped to 21.2 in February, from 29.7 in January. The Expectations Index declined to 27.5 from 42.5.
"All in all, not only do consumers feel overall economic conditions have grown more dire, but just as disconcerting, they anticipate no improvement in conditions over the next six months," said Lynn Franco, director of The Conference Board Research Center, Forbes.com reported.
Major retailers such as Target and Home Depot posted depressed 4th quarter sales, reported the Associated Press and other news sources.
Jobs are a major consumer concern. The U.S. unemployment rate, currently 7.6%, is expected to reach 9% later this year, says the latest survey of leading forecasters by the National Association for Business Economics (NABE).
In addition, house prices are expected to decline 5% during the year, the survey found. The NABE panel expects the recession to continue through mid-year, with large declines in real GDP in the first and second quarters. "The cyclical downturn will rival that of 1973-75," NABE states.