US Consumer Confidence Hits Forty-Year Low

30 October 2008

NEW YORK: US consumer confidence has fallen to its lowest level since 1961, as optimism about the condition of the economy fell from 61.4 points in September to 38 points in October, reports business research body the Conference Board

Consumer spending traditionally contributes around 70% of US economic growth, but spend on discretionary items has stalled due to anxiety about the tumult in the equity markets, rising unemployment and falling property prices.

Around 460,000 Americans a week are said to be losing their jobs, with overall unemployment now standing at 6.1% of the country's labour force. 

The S&P Case-Shiller Index, which regularly surveys property prices in twenty major US cities, also found that real estate prices fell year-on-year  by an average of 16.6% in August.

Values are also down by over a quarter in a number of major metropolitan districts, including Los Angeles, Miami, San Francisco and Las Vegas and others.

Says Dimitry Fleming, US economist at Dutch bank ING: "Despite a reduction in the number of homes for sale, supply is still enormous. We expect no end to the price declines till end 2009."

Data sourced from The Times (UK); additional content by WARC staff