Consumer confidence hits 26-year low, survey says

U.S. consumer confidence fell for a third straight month in April, hitting its weakest level in 26 years on heightened worries over inflation and the sagging housing market, a survey showed Friday.

The Reuters/University of Michigan Surveys of Consumers said its final index of confidence for April fell deeper into recessionary territory, to 62.6 from 69.5 in March and below economists’ median expectation of 63.2 in a Reuters poll.

The April result is the lowest since March 1982’s 62.0, when the “stagflationary” period of low growth and high inflation was still an issue for many Americans.

“More consumers reported that their personal financial situation had worsened than any time since 1982 due to high fuel and food prices as well as shrinking income gains and widespread reports of declines in home values,” the survey said.

“Never before in the long history of the surveys have so many consumers reported hearing news of unfavorable economic development as in the April survey.”

Nearly 9 in 10 consumers thought the economy was now in recession, Reuters/University of Michigan said.

Although a tax rebate will bolster consumer spending, consumers favor “by a wide margin” using the rebate to repay debt and to add to their savings, according to the surveys.