U.S. confidence skids at year-end
NEW YORK - Consumer confidence in the U.S. hit a new all-time low in December according to the Conference Board's Consumer Confidence Index. The Index now stands at 38, down from 44.7 in November (1985=100).
The Present Situation Index plunged to 29.4 from 42.3 last month and the Expectations Index declined to 43.8 from 46.2 in November.
Measured against year-earlier results, the Confidence Index fell 52.6 points, the Present Situation Index plummeted 83.5 points and the Expectations Index declined 32 points.
Current business conditions were rated as "good" by just 7.7 per cent of the consumers surveyed, with 46 per cent saying conditions were "bad." The balance - 46.3 per cent - said conditions were "normal."
In comparison, consumer expectations for business conditions in six months were sharply higher, with just 32.8 per cent saying conditions would be worse. Just over half predicted conditions would be the same, with the rest - 13.4 per cent - saying conditions would be better.
More December consumers expected to purchase big-ticket items in six months than in November. Just over 26 per cent of those surveyed in December planned to buy a major appliance in six months, up from 24.5 per cent in November. The number planning on buying a home in six months also increased, from 2.1 per cent in November to 2.5 per cent in December.
All but one of the nine U.S. regions reported declines in confidence from November to December. The lone holdout was the West South Central region, where confidence held steady at 65 over the two-month period. The lowest score - 24.2 - was reported in the East North Central region of the country.
"The further erosion of the Consumer Confidence Index reflects the rapid and steep deterioration of economic conditions that occurred in the fourth quarter of 2008," said Lynn Franco, director of the Conference Board Consumer Research Center.
"The Present Situation Index is now close to levels last seen in the months following the 1990-91 recession," she continued, "but is not as low as levels reached during the 1980-81 recession. Declines in the Expectations Index appear to be moderating, but this index continues to hover at historical lows.
"Both sub-indexes (sic) bear careful watching over the next several months to see if they are starting to show signs of approaching a bottom. In the meantime, however, the overall economic outlook remains quite dismal for the first half of 2009, and only a modest recovery is expected in the second half."
The Consumer Confidence Survey is based on a representative sample of 5,000 U.S. households. The cutoff date for December's preliminary results was 22 December 2008.