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US consumer confidence slumps in October

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by Kay Mitchell

US consumer confidence slumped in October, the Conference Board has reported.

The closely-monitored Consumer Confidence Index from the Conference Board dived to 39.8 this month from September’s reading of 46.4.

Not only was the reading less than forecasts of a level of 46.0, it was the lowest since March 2009, when the US was in recession.

Furthermore, the index remains far away from the 90 points required to show that the world’s largest economy is on solid footing.

Since the index commenced in 1967, the average reading has been 95.6.

The index hit a record high of 144.7 in 2000, while its all-time low was 25.3 in February 2009, when the country was in the midst of recession.

Commenting on the figures, Lynn Franco, director of the Conference Board Consumer Research Centre said: “Consumer confidence is now back to levels last seen during the 2008-2009 recession.

“Consumer expectations, which had improved in September, gave back all of the gain and then some, as concerns about business conditions, the labor market and income prospects increased,” she added.

Meanwhile, the present situation index, a measure of consumers’ assessment of current economic conditions, fell for the sixth month in a row to 26.3 from a revised 33.3 in September.

The report also showed that households are concerned about future incomes – raising doubt over spending – something which is closely monitored as it accounts for more than two-thirds of economic output.

The economic recovery in the US remains sluggish in the face of higher unemployment and a depressed housing market.

In other news this week, the Standard & Poor’s/Case-Shiller index showed that single-family house prices rose by just 0.2% in August on a monthly basis, while prices were 3.8% lower when compared with August 2010.

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News posted: October 26, 2011

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