My comment: I have told several times that, nowadays, this index is extremely important as, in normal circumstances, it predicts social cohesion when its value is very high, and social unrest when its value is very low. Its current value, 38, is extremely low for a normal society.
As I told by e-mail to some of you, I thought that it would be slightly above 50. I, and many other economists according to this report, was wrong. Anyway, the expectation that a new president can improve the situation probably will refrain demostrations, riots, etc. as would be the normal consequence of this value. I guess that this short period of relief that US economy is living this month and maybe one or two months ahead, will make this index to rise slightly until the next wave of bad news. Anyway, this index becomes extremely important nowadays and has to be monitored very close in the near future.. Peace and best wishes. Xi http://www.bloomberg.com/apps/news?pid=20601087&sid=a08qtJ.tt8ng&refer=home Oct. 28 (Bloomberg) -- U.S. consumer confidence fell to the lowest level on record in October as stocks plunged and banks shut off credit, raising the risk spending will collapse. The Conference Board's confidence index tumbled to 38, lower than forecast and the worst reading since monthly records began in 1967, the New York-based research group said today. A separate report showed home values continued to drop in August. Stocks pared gains on the outlook for consumer spending, which accounts for more than two-thirds of the economy. The report strengthened expectations that the Federal Reserve will lower interest rates again after a likely reduction tomorrow. ``It'll be a prolonged recession,'' said Carl Riccadonna, a senior economist at Deutsche Bank Securities Inc. in New York. ``We're looking at a very sharp pullback in consumer spending. As go consumers, so goes the broader economy.'' Whirlpool Corp., the world's largest appliance maker, said today it will cut 5,000 jobs and forecast lower annual profit as the global credit crunch and U.S. housing slump clips appliance sales. Royal Caribbean Cruises Ltd., the world's second-largest cruise operator, forecast profit that trailed some analysts' estimates because of a ``significant deterioration'' in bookings. The confidence report underscored voter discontent with the country's direction heading into the Nov. 4 presidential election. A majority of voters think Illinois Senator Barack Obama, the Democrat, will be better able to handle the economic turmoil than Republican rival John McCain, according to polls. Consumer confidence was projected to drop to 52, according to the median estimate in a Bloomberg News survey of 66 economists. Forecasts ranged from 45 to 56.6. September's reading was revised up to 61.4 from an originally reported 59.8. Heading South ``The economy feels like it is contracting at a rapid pace,'' Lewis Alexander, chief economist at Citigroup Global Markets Inc. in New York, said in a Bloomberg Television interview. ``It's clear that consumers have really been affected by the volatility we've seen in the last six weeks.'' The Standard & Poor's 500 index rose 9.4 points, or 1.1 percent, to 858.34 as of 11:50 a.m. in New York, after being up almost 33 points earlier. Treasury securities fell. The 23.4-point drop in confidence this month was the third- biggest on record, trailing two plunges in the early 1970s linked to oil shocks. Measures on current conditions and expectations both declined. Home prices in 20 U.S. metropolitan areas dropped 16.6 percent in August from the same month in 2007, the fastest pace since year-over- year records began in 2001, a report from S&P/Case-Shiller today showed. For a fifth consecutive month, all areas registered a decrease in prices from a year earlier. Foreclosures Climb The housing slump is likely to extend well into a fourth year as foreclosures put more properties on the market and drive down prices even more. The Conference Board's measure of present conditions dropped to 41.9 from 61.1 the prior month. The gauge of expectations for the next six months slumped to 35.5 from 61.5. The share of consumers who said jobs are plentiful dropped to 8.9 percent from 12.6 percent last month. The proportion of people who said jobs are hard to get jumped 5 points to 37.2 percent. The proportion of people who expect their incomes to rise over the next six months dropped to 10.8 percent from 15.1 percent. The share expecting more jobs decreased to 7.4 percent from 11.9 percent. The confidence figures corroborate declines seen in other measures. A report earlier this month showed the Reuters/University of Michigan preliminary index of consumer sentiment decreased in October by the most on record. The Conference Board's index tends to be more influenced by attitudes about the labor market, economists have said. Job Losses The economy lost jobs for nine consecutive months through September, bringing the total drop in payrolls to 760,000 this year, Labor Department figures showed. Some economists anticipate job losses accelerated in October. Consumer spending probably dropped last quarter by the most in almost two decades, economists forecast a Commerce Department report will show in two days. As a result, the economy probably shrank from July to September, the survey showed. Today's confidence report showed fewer people planned to purchase automobiles and major appliances. Home-buying plans improved. The slump in spending may be even bigger this quarter as consumers retrench. The International Council of Shopping Centers predicts the November-December holiday season, which brings in more than a third of some retailers' annual sales, will be the weakest since 2002. The credit freeze ``impacted consumers' attitudes,'' Farooq Kathwari, chief executive officer of home-furnishings retailer Ethan Allen Interiors Inc., said in a Bloomberg Television interview this month. ``People are cautious, people are holding back.'' --~--~---------~--~----~------------~-------~--~----~ You received this message because you are subscribed to the Google Groups "World-thread" group. To post to this group, send email to [email protected] To unsubscribe from this group, send email to [EMAIL PROTECTED] For more options, visit this group at http://groups.google.com/group/world-thread?hl=en -~----------~----~----~----~------~----~------~--~---
