Consumers gloomiest ever

One sign that maybe things are at their worst... http://news.yahoo.com/s/nm/20081028/bs_nm/us_usa_economy_6 NEW YORK (Reuters) – U.S. consumer confidence dived to a record low in October as plunging home values and a severe financial crisis left Americans anxious about their jobs and pessimistic about the future. The Conference Board said on Tuesday its index measuring consumer sentiment tumbled... [more]

One sign that maybe things are at their worst... http://news.yahoo.com/s/nm/20081028/bs_nm/us_usa_economy_6 NEW YORK (Reuters) – U.S. consumer confidence dived to a record low in October as plunging home values and a severe financial crisis left Americans anxious about their jobs and pessimistic about the future. The Conference Board said on Tuesday its index measuring consumer sentiment tumbled to 38.0 in October, down from 61.4 in September and the lowest reading since the index was first published back in 1967. One factor depressing Americans was the rapidly declining value of their homes. U.S. single-family home prices dropped a record 16.6 percent in August from a year earlier and plummeted more than 30 percent in Las Vegas and Phoenix, Standard & Poor's said on Tuesday. This was making consumers feel a lot less wealthy and dampening their spending, on which U.S. economic growth so keenly depends. "Consumers are completely shut down at this point," said Lindsey Piegza, a market analyst at FTN Financial. "They see no end in sight even with all the actions that the government has taken." The government has indeed done a lot. The Federal Reserve was expected to cut interest rates yet again this week to prop up the economy and try to stimulate lending, while the Treasury seemed to be trying to broaden its support of industry to include insurers and automakers. Yet none of this has stopped the carnage in the stock market, which on Tuesday was struggling to hold in positive territory, and has already fallen nearly 25 percent in October alone. The losses have also spread globally, with emerging markets showing an even more virulent reaction to the prospect of a global recession, and theories about a possible "decoupling" from the United States now shown to be largely implausible. HOLE IN THE BUDGET The frantic efforts of U.S. financial authorities to restore calm in the markets will also clearly come at a large long-term cost to taxpayers. Anthony Ryan, the Treasury's acting undersecretary for domestic finance, said on Tuesday the government faces huge borrowing needs this year to finance the multiple programs aimed at soothing investors' nerves. Against this backdrop, it is not hard to see why consumers had grown so glum. In the Conference Board survey, the present situation index fell to 41.9, its lowest since December 1992, from 61.1 in September The expectations subindex plunged to a record low of 35.5 from an upwardly revised 61.5 last month and from 80.0 a year ago. The number of respondents who said jobs are "hard to get" rose to 37.2 percent from 32.2, while those saying jobs were "plentiful" fell to 8.9 percent from 12.6. Housing was another centerpiece of the economy's woes. According to S&P, home prices in its narrower index of 10 metropolitan areas declined 1.1 percent from July to August alone, and were down 17.7 percent from a year ago. "The downturn in residential real estate prices continued, with very few bright spots in the data," David M. Blitzer, chairman of the Index Committee at Standard & Poor's, said in the statement. (Reporting by Steven S. Johnson, Pedro Nicolaci da Costa and Julie Haviv; Editing by Andrea Ricci) [less]