US consumer confidence hits bottom

[Naveed Yaseen]

WASHINGTON, Dec 30: US consumer confidence plunged to a historic low in December amid the rapidly deepening recession and the outlook for the next six months is “quite dismal,” the Conference Board said on Tuesday.

The private research firm, which has been measuring consumer confidence since 1967, said the index tumbled to 38.0 in December from 44.7 in November due to the deteriorating economic conditions in the fourth quarter.

Consumers’ outlook for the first half of 2009 remains “quite dismal,” and they see “only a modest recovery” in the second half of the year, said Lynn Franco, research director at the Conference Board.

“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,” she said.

The record 38.0 figure was lower than the prior low record of 38.8 in October, and was weaker than the 45.5 reading which had been forecast by analysts.

The report was based on a survey of 5,000 US households through December 22.

The period was marked by an escalating global financial crisis and massive government efforts to bail out banks and unblock frozen credit. On December 1, the world’s biggest economy officially was declared to have been in recession since December 2007.

Much of the plunge was due to a substantial deterioration in the present situation index, a component of the headline index, which plummeted to 29.4, from 42.3 in November and 43.5 in October.

The present situation index “is now close to levels last seen in the months following the 1990-91 recession, but is not as low as levels reached during the 1981-82 recession” when unemployment was high, Franco said.—AFP

http://www.dawn.com/2008/12/31/ebr9.htm