Consumer Confidence Slumps to Lowest Level in 10 Months
Bloombergreports that U.S. Consumer Confidence fell to 46, its lowest level in 10 months. Economists had been expecting a much smaller drop.
The Conference Board’s confidence index slumped to 46, below the lowest forecast in a Bloomberg News survey of economists, from 56.5 in January, a report from the New York- based private research group showed today. A separate report showed home prices rose for a seventh month.
Stocks fell and Treasuries gained after the confidence report also showed attitudes about current conditions fell to the lowest level in 27 years and the outlook for wages dimmed. The survey reinforces expectations Federal Reserve Chairman Ben S. Bernanke will repeat the central bank's pledge to keep interest rates low for "an extended period" in testimony to Congress tomorrow.
"Consumer spending is going to disappoint throughout most of the year," said Steven Ricchiuto, chief economist at Mizuho Securities USA Inc. in New York. The economy "may not be out of the woods."
Stocks sank on the news. The report raises concerns the economy could slip back into a recession. The potential of rising gas prices this summer could also pose a problem with oil already around the $80 a barrel mark. Rising gas prices are not going to help consumer confidence or consumers' wallets.
