Consumer Confidence Index Declines To A New All-Time Low

The Conference Board Consumer Confidence Index declined to 38 in December, a new all-time low. The reading was much worse than the 45.5 economists had expected and was down from 44.7 in November.

Says Lynn Franco, Director of The Conference Board Consumer Research Center, said, "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. 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. Declines in the Expectations Index appear to be moderating, but this index continues to hover at historical lows."

Consumers' appraisal of current conditions grew substantially worse in December. Those claiming business conditions are "bad" increased to 46.0 percent from 40.6 percent, while those claiming business conditions are "good" declined to 7.7 percent from 10.1 percent last month.

Consumers' short-term outlook was only moderately more pessimistic. Those anticipating business conditions to worsen over the next six months increased to 32.8 percent from 28.3 percent, while those expecting conditions to improve rose to 13.4 percent from 11.5 percent.

The percent of consumers anticipating fewer jobs in the months ahead increased to 41.0 percent from 33.7 percent, while those expecting more jobs increased to 9.7 percent from 9.2 percent. The proportion of consumers anticipating an increase in their incomes decreased to 12.7 percent from 13.1 percent.