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Consumer Confidence Hits All-Time Low

Signs point to drop in consumer spending, deepening downturn

By Kevin Spak, Newser Staff

Posted Oct 28, 2008 10:07 AM CDT

(Newser) – Consumer confidence hit a record low in October, Bloomberg reports, raising the specter that spending will slow significantly. The Conference Board’s index dove to 38, the lowest reading since the metric’s inception in 1967, and far worse than analysts expected. With the stock markets volatile, home equity deteriorating, and job losses piling up, household wealth has been hit hard.

Analysts had only expected the reading to drop to 52. “Collapsing consumer confidence appears to be reinforcing the economic downturn, with labor market weakness poised to intensify,” said one economist; indeed, the economy lost jobs for nine consecutive months through September. The Board’s measurement of present conditions dropped to 41.9, while expectations for the next 6 months fell to 35.5, from 61.5.

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Consumer Carlos Garda shops at the COSTCO warehouse in Glendale, Calif. Friday, Aug. 10, 2007. (AP Photo/Damian Dovarganes)

The decrease in confidence likely means a drop in consumer spending, which in turn will lead to a deepening of the current economic downturn. (AP Photo)

The Conference Board's consumer confidence index hit its lowest point since measurements began in 1967. (AP Photo)

Victoria Fiedler and her daughter Christine window shop as they walk past Fontenay on Devine Street in Columbia, SC, Wednesday, March 25, 2008. (AP Photo/Mary Ann Chastain)

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The economy feels like it is contracting at a rapid pace. It's clear that consumers have really been affected by the volatility we've seen in the last six weeks. - Lewis Alexander, Citigroup economist

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Consumer Confidence Hits All-Time Low