NEW YORK, April 29, 2008
Consumer Confidence Hits 5-Year Low
Gas Prices, Weak Job Prospects Dim Shoppers' View Of U.S. Economy
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Eroding consumer confidence foreshadows weakening consumer spending, which could further hurt the already deteriorating economy since consumer spending accounts for more than two-thirds of the nation's economic activity. (AP Photo/David Zalubowski)
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Interactive Eye On The Economy In-depth features on U.S. markets, taxes, employment and the Federal Reserve.
The New York-based Conference Board said that its Consumer Confidence Index, which had plummeted in March, fell again to 62.3 in April, down from the revised 65.9 last month and 76.4 in February. While the reading was a little better than the 61.0 expected by analysts, the index remains at its weakest point since March 2003, when it registered 61.4, ahead of the U.S. invasion of Iraq.
"This continued weakening suggests that not only has the feeble level of growth in the first quarter spilled over into the second quarter, but the economic conditions may have slowed even further," Lynn Franco, director of the Conference Board Consumer Research Center, said in a statement. "And not only are lackluster business and job conditions eroding confidence, but rising gasoline prices are undoubtedly heightening concerns."
The Present Situation Index, which measures shoppers' current assessment of economic conditions, dropped to 80.7 in April from 90.6 in March. The Expectations Index, which measures the outlook over the next six months, was little changed at a depressed 50.1, compared to 49.4 in March.
Eroding consumer confidence foreshadows weakening consumer spending, which could further hurt the already deteriorating economy since consumer spending accounts for more than two-thirds of the nation's economic activity.
Investors were unfazed, however, by the fourth straight month of declines in the consumer sentiment reading. In midmorning trading, the Dow Jones industrial average fell 0.32, or less then 0.01 percent, to 12,871.43. Broader markets were narrowly lower.
The downbeat news on confidence came as the widely watched Standard & Poor's/Case-Shiller index showed that housing prices dropped in February at the fastest rate ever, showing that the housing slump is gaining momentum.
Franco noted that consumers' worries about inflation are still rising and that measure now matches the all-time high reached in the aftermath of Hurricane Katrina in the fall of 2005 when gas and oil prices soared after the hurricane and other storms devastated New Orleans and shut down a large chunk of the nation's oil refineries.
She added that the percentage of respondents surveyed who intended to take a vacation over the next six months has fallen to a 30-year-low, another indications that consumers are turning more frugal.
The dismal reading is another big blow to retailers, which have struggled with a spending malaise that has worsened in recent months. Shoppers are being confronted with a number of economic problems as soaring gas and food bills are outpacing meager wage gains. Consumers are also faced with an escalating credit crisis and slumping housing values.
A big worry is the employment market, which has been shedding jobs in recent months. The Labor Department is expected to show another loss of 75,000 when it releases its April report Friday; that follows a 80,000 job loss in March. Analysts also estimate that the unemployment rate will tick up to 5.2 percent from 5.1 percent in March.
Meanwhile, money from the government's economic stimulus plan have begun dropping into bank accounts - but with rising gas and groceries bills, early indications suggest that shoppers will focus on catching up on basics like meat or eggs, instead of buying a new TV or clothes. That means that grocery stores and discounters could be the few beneficiaries in the retail world of the stimulus plan.
The Consumer Confidence report - derived from responses through April 22 - is based on a representative sample of 5,000 U.S. households.
© MMVIII The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.
Best-selling author Mitch Albom on his first nonfiction work since "Tuesdays with Morrie."
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See all 38 CommentsYeah, crybabies! And you can''t stand that people have the freedom to speak up, can you? Pathetic, you and your ilk!
Troll? You are projecting your ugliness onto others.
It is best not to respond to this troll.
His smart-ask quips hold no value and are designed to lie, incite, and give a simplistic, false, and an idiotic ingredient to the Bush&Co talking points.
Ignore him.
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Posted by RandyNason
You spoiled pig. Your petty statement does a tremendous disservice to those truly suffering. How long has it been since you had a hungry belly you couldn''t fill? You and your ilk disgust me.
As for the article, oh yeahhhh; I''m really going to put a lot of stock in what John Q. Consumer thinks -- the same ones who couldn''t even figure out how much house they could afford.
Whiney freakin'' crybabies...
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Posted by RandyNason at 07:59 PM : Apr 29, 2008
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Thanks, Bushies!!!
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Posted by jamesm12341 at 03:43 PM
Look Caca for brains, they can make all the money they want, WITHOUT any subsidies, WITHOUT my tax dollars helping them. Now, do YOU GET IT? Or do you think they have a right to those subsidies while they mess with us?
Here''s my 2-cents. The economy stinks right now! stimilus package is a joke and the FED is going to print more money starting tomorrow (I think) which will devalue our dollar a little more and oil prices will go over $120. Yikes!!
Posted by jamesm12341 at 06:30
Awwww thank you jwind11 for proving me right--is it OCD? too bad.
Posted by jamesm12341 at 03:43 PM : Apr 29, 2008
Yes? no? Again jwind11 you are so proud of your lack of knowledge that you insist on telling the world just how ignorant you are!
If you at least asked intelligent questions, making an attempt to gain knowledge it would be a good thing, but you are so stuck on stupid, and dammmed proud to prove it!
Go back to poker, that''s a stupid game you''re good at (so you say)
Posted by jamesm12341 at 03:43 PM : Apr 29, 2008
Yes? no? Again jwind11 you are so proud of your lack of knowledge that you insist on telling the world just how ignorant you are!
If you at least asked intelligent questions, making an attempt to gain knowledge it would be a good thing, but you are so stuck on stupid, and dammmed proud to prove it!
Go back to poker, that''s a stupid game you''re good at (so you say)
IT''S ELITISM!
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Posted by jamesm12341 at 03:45 PM : Apr 29, 2008
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Duh?? That isn''t the question Bootlicker and YOU know it... The Question is still WHAT HAPPENED!! Sieg Heil Bush
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