My comment: I told some months ago that we have to follow this indicator up very closely because it predicts social unrest in all economies.
http://www.bloomberg.com/apps/news?pid=20601087&sid=aw3tMMqHeits&refer=home Dec. 30 (Bloomberg) -- Confidence among U.S. consumers unexpectedly dropped in December to a record low as Americans grew increasingly concerned about jobs, raising the risk that spending will keep weakening into the new year. The Conference Board’s index of consumer confidence fell to 38, the lowest level since records began in 1967, from 44.7 in November, the New York-based private research group said today. Another report showed declines in property values accelerated. Rising unemployment, mounting foreclosures and declining household wealth have dimmed the outlook for consumer spending, which accounts for 70 percent of the economy. This year’s holiday season, the most important for retailers, was probably the worst in at least four decades. “The deterioration going on right now in the labor market made people feel much worse,” said Nigel Gault, chief U.S. economist at IHS Global Insight in Lexington, Massachusetts. “If people are worried about their jobs, they are not going to spend. That is extremely negative.” Economists surveyed by Bloomberg News forecast the confidence figure would increase to 45.5 from a previously reported 44.9 for November, according to the median of 52 projections. Estimates ranged from 40 to 51.1. Earlier today, reports showed the decline in home prices accelerated in October as credit dried up and foreclosures mounted, and business activity in December contracted for a third month. Home Prices Drop The S&P/Case-Shiller home-price index of 20 U.S. metropolitan areas fell a record 18 percent in October from a year earlier, led by declines in Phoenix and Las Vegas. All 20 cities showed a decline in the year ended in October. The Institute for Supply Management-Chicago said its business index climbed to 34.1 this month from a 26-year low of 33.8 in November. Readings less than 50 signal contraction. Stocks trimmed gains following the reports and Treasury securities fell. The Standard & Poor’s 500 index rose 0.7 percent to 875.7 at 10:15 a.m. The share of consumers who said jobs are plentiful fell to 6.2 percent, the lowest level in 16 years, from 8.7 percent last month, today’s report showed. The proportion of people who said jobs are hard to get increased to 42 percent from 37.1 percent. Americans’ views about their financial well-being in future months deteriorated. The Conference Board’s gauge of the outlook for the next six months decreased to 43.8 from 46.2 in November. The share of respondents expecting their incomes to rise over the next six months fell to 12.7 percent from 13.1 percent. Americans were more hopeful of finding jobs in the future. The measure of present conditions dropped to 29.4 from 42.3. ‘Dismal’ Outlook “The overall economic outlook remains quite dismal for the first half of 2009,” Lynn Franco, director of the Conference Board’s consumer survey, said in a statement. The grimmer view on jobs swamped the effects of the drop in gasoline prices that helped other confidence measures climb this month. The Reuters/University of Michigan’s sentiment gauge rose from November’s 28-year low. The average price of a gallon of regular gasoline dropped to $1.62 on Dec. 28, down 61 percent from July’s record. Even so, the decline isn’t enough to undo the damage from the loss of 1.9 million jobs so far this year and the record destruction in household wealth caused by the slump in home and stock prices. Economy to Shrink Gross domestic product contracted at a 0.5 percent annual pace in the third quarter, the worst performance in seven years, the Commerce Department said last week. Economists surveyed by Bloomberg earlier this month projected the economy will contract at a 4.3 percent rate this quarter, hurt by another decline in consumer spending. The jobless rate could reach 8.2 percent at the end of next year compared with last month’s 15-year high of 6.7 percent, according to the survey. President-elect Barack Obama has expanded his economic stimulus goals and called for creating or saving 3 million jobs over the next two years. Vice President-elect Joe Biden said Dec. 23 the incoming administration and congressional leaders are nearing an agreement on the broad principles of a stimulus policy. The International Council of Shopping Centers projects this was the worst holiday shopping season, the most important period for retailers, in at least four decades. “It’s dismal,” Patrick Byrne, chief executive officer of Overstock.com, the Internet seller of discounted brand-name goods, said Dec. 24 in an interview on Bloomberg Television. “It seems the entire retail nation is running a going-out-of-business sale. It means the pricing is very competitive.” --~--~---------~--~----~------------~-------~--~----~ 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 -~----------~----~----~----~------~----~------~--~---
