Consumers' 'Grim Financial Realities' a Drag on Recovery
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Consumer confidence as reported by the Reuters/University of Michigan Surveys of Consumers ebbed somewhat in November, with consumers reporting continued declines in their personal financial situations.
"The grim financial realities faced by consumers rose to the worst levels ever recorded in [the] more than sixty year history of the survey,"according to Richard Curtin, the director of the Reuters/University of Michigan Surveys of Consumers.
Consumer confidence has been at its lowest since 1946 for much of the last two years. As the stress on the consumer's finances continues month and after month, more consumers are pressed into financial difficulty, a Reuters/University of Michigan news release noted.
The Index of Consumer Sentiment was 67.4 in November, down from 70.6 in October and 73.5 in September. However the November index remained substantially above the 53.3 level of last November, which was the cyclical low point.
The Index of Consumer Expectations, a closely watched component of the Index of Leading Economic Indicators, was 66.5 in November, down from 68.6 in October and 73.5 in September. This was well above last November's 53.9, as well.
"Consumers cite their deteriorating finances as well as their uncertainty about future job and income prospects more than ever before, and this has made them very cautious spenders," Curtin noted.
Consumers believe that the worst of the downturn is over. However, they remain uncertain as to when the economy will become strong enough to generate enough jobs to significantly impact the unemployment rate, notes the news release.
See the full news release here.