Consumer confidence darkens further in January
Americans are in no mood to spend their way out of this recession.
The Conference Board said its consumer confidence index edged down to 37.7 in January from a revised 38.6 in December, lower than the reading of 39 that economists surveyed by Thomson Reuters had expected. In recent months the index has hit its lowest troughs since it began in 1967, and is hovering at less than half its level of January 2007, when it was 87.3.
“It appears that consumers have begun the new year with the same degree of pessimism that they exhibited in the final months of 2008,” Lynn Franco, director of the Conference Board Consumer Research Center, said in a statement. “Looking ahead, consumers remain quite pessimistic about the state of the economy and about their earnings.”
The present situation index, which measures how shoppers feel now about the economy, fell slightly to 29.9 from 30.2 last month. The expectations index, which measures shoppers’ outlook over the next six months, fell to 43.0 from 44.2.
Economists closely watch consumer confidence since consumer spending accounts for more than two-thirds of economic activity.