Oct 28, 2008 10:15 am US/Pacific
Consumer Confidence Hits Lowest Level Ever
WASHINGTON (AP) ―
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Consumer Confidence Has Hit A Record Low: Is It Going To Get Worse Before It Gets Better?
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Consumer confidence plunged to its lowest on record in October, a private research group said Tuesday, as stock markets dropped sharply and companies laid off workers.
The Conference Board said the consumer confidence index fell to 38, down from a revised 61.4 in September and significantly below analysts' expectations of 52.
That's the lowest level for the index since the Conference Board began tracking consumer sentiment in 1967, and the third-steepest drop. A year ago, the index stood at 95.2.
Wall Street, which has come to expect bad news on the economy, took the report in stride. The Dow rose 2.5 percent in early trading. The broader S&P 500 index rose 2.2 percent.
The news was not good for Main Street, though.
"Consumers are extremely pessimistic," said Lynn Franco, director of the Conference Board's Consumer Research Center. "This news does not bode well for retailers who are already bracing for what is shaping up to be a very challenging holiday season."
Separately, a closely watched index of home prices fell by its steepest ever annual rate in August.
The Standard & Poor's/Case-Shiller 20-city housing index dropped a record 16.6 percent from August last year, the largest drop since its inception in 2000.
The 23.4-point drop in the consumer confidence index from September to October is the steepest since it fell 36.9 points from October 1973 to December 1973, when the economy was in the throes of a severe recession. Then, the index was measured every two months. The index dropped 24.3 points from December 1969 to February 1970, Franco said.
Consumer sentiment is closely watched because consumer spending powers about 70 percent of economic activity.
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Timeline: U.S. Credit Crunch & Financial Failures
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