Pedro Nicolaci da Costa
Tuesday, October 28, 2008
NEW YORK (Reuters) – U.S. consumer confidence dived to a record low in October as plunging home values and a severe financial crisis left Americans anxious about their jobs and pessimistic about the future.
The Conference Board said on Tuesday its index measuring consumer sentiment tumbled to 38.0 in October, down from 61.4 in September and the lowest reading since the index was first published back in 1967.
One factor depressing Americans was the rapidly declining value of their homes. U.S. single-family home prices dropped a record 16.6 percent in August from a year earlier and plummeted more than 30 percent in Las Vegas and Phoenix, Standard & Poor’s said on Tuesday.
This was making consumers feel a lot less wealthy and dampening their spending, on which U.S. economic growth so keenly depends.
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“Consumers are completely shut down at this point,” said Lindsey Piegza, a market analyst at FTN Financial. “They see no end in sight even with all the actions that the government has taken.”
The government has indeed done a lot. The Federal Reserve was expected to cut interest rates yet again this week to prop up the economy and try to stimulate lending, while the Treasury seemed to be trying to broaden its support of industry to include insurers and automakers.
Yet none of this has stopped the carnage in the stock market, which on Tuesday was struggling to hold in positive territory, and has already fallen nearly 25 percent in October alone.
The losses have also spread globally, with emerging markets showing an even more virulent reaction to the prospect of a global recession, and theories about a possible “decoupling” from the United States now shown to be largely implausible.
This article was posted: Tuesday, October 28, 2008 at 12:03 pm