Americans’ mood about the economy darkened further in January, sending a widely watched barometer of consumer sentiment to a new low, the Conference Board reported today.
The Board said its Consumer Confidence Index edged down to 37.7 from a revised 38.6 in December. In recent months the index has hit its lowest troughs since it began in 1967, and is hovering at less than half its level of January 2007, when it was 87.3.
The Present Situation Index, which measures how shoppers feel now about the economy, declined slightly to 29.9 from 30.2 last month. The Expectations Index,which measures shoppers’ outlook over the next six months, decreased to 43.0 from 44.2.
Economists closely watch consumer confidence since consumer spending accounts for more than two-thirds of economic activity. But the latest signs of a nervous consumer spur fresh alarm about the economy and the health of the retail industry, which is struggling with the most severe spending retrenchment in decades.
Stores limped through the weakest holiday period since at least 1969, according to the International Council of Shopping Centers. And retail sales appear to be only deteriorating in January as shoppers continue to be whipsawed by massive layoffs across all sectors of the economy. The unemployment rate, now at a 16-year high of 7.2 percent, could hit 10 percent or higher later this year or early next year, according to some analysts’ projections.
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