Consumer Confidence Plunges to Record Low
chart via FusionIQ, Bloomberg
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The Conference Board reported Consumer Confidence Index for October hit a record low of 38.
(*Note: Interim low - market was already in a secular upswing.)
(#Note: Consumer confidence readings that were closest to the latest reading.)
Table via Mike Panzner
From the Conference Board
"The Conference Board Consumer Confidence Index™, which had improved moderately in September, fell to an all-time low in October. The Index now stands at 38.0 (1985=100), down from 61.4 in September. The Present Situation Index decreased to 41.9 from 61.1 last month. The Expectations Index declined to 35.5 from 61.5 in September. The Consumer Confidence Survey is based on a representative sample of 5,000 U.S. households.
Says Lynn Franco, Director of The Conference Board Consumer Research Center: "The impact of the financial crisis over the last several weeks has clearly taken a toll on consumers' confidence. The decline in the Index (-23.4 points) is the third largest in the history of the series, and the lowest reading on record. In assessing current conditions, consumers rated the labor market and business conditions much less favorably, suggesting that the fourth quarter is off to a weaker start than the third quarter.
Consumers' appraisal of current conditions deteriorated sharply in October. Those saying business conditions are "bad" increased to 38.3 percent from 33.4 percent, while those claiming business conditions are "good" declined to 9.2 percent from 12.8 percent. Consumers' assessment of the labor market was also much more negative. The percentage of consumers saying jobs are "hard to get" rose to 37.2 percent from 32.2 percent in September, while those claiming jobs are "plentiful" decreased to 8.9 percent from 12.6 percent."
FYI: This sort of sentiment always favors the challenger, not the incumbent party, in the White House race.
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Source:
Consumer Confidence Index™ Plummets to an All-Time Low
The Conference Board, October 28, 2008
http://www.conference-board.org/economics/ConsumerConfidence.cfm
Tuesday, October 28, 2008 | 10:45 AM | Permalink
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Comments
It's just a mental plunge!
Posted by: Rob P | Oct 28, 2008 10:48:58 AM
and Wall St crooks are laughing...
Although 2008 has shaped up to be one of the worse years since the Great Depression for Wall Street, neither massive layoffs nor outright bankruptcies will deter year-end bonuses from going out to many bankers.
A Bloomberg report said that Wall Street's banks still have roughly $20 billion set aside to pay bonuses for 2008. A brief run down of the allocations banks have set aside for bonuses:
* Merrill Lynch & Co.: $6.7 billion - posted losses for 5 consecutive quarters
* Goldman Sachs Group Inc.: $6.85 billion - still profitable, the bank slashed the bonus size by 32%
* Morgan Stanley: $6.44 billion - also profitable, bonuses here will decline 20%
* Lehman Brothers Inc: $2.5 billion - the bank walled off the money for its U.S. unit before filing for Chapter 11
http://www.thedeal.com/dealscape/2008/10/wall_street_has_roughly_20_bil.php
Posted by: km4 | Oct 28, 2008 10:53:14 AM
Bunch of whiners!!
Posted by: Jeff M. | Oct 28, 2008 10:54:59 AM
@km4: Seems that Wall Street is making good use of those bailouts to once again (shock of all shocks) to enrich themselves at the expense of everyone and everything else. Market confidence and trust won't come back until this entire system is dismantled, purged and started anew. Why would anyone in their RIGHT minds trust anyone peddling nonsense on Wall Street anymore? Wait, don't answer that question.
Posted by: Jeff M. | Oct 28, 2008 11:01:10 AM
Socialism.....here we come! Then we can just fix prices on the exchanges.
Egalitarian society FTW!
Posted by: RT | Oct 28, 2008 11:01:54 AM
Prosperity is right around the corner.
Posted by: Winston Munn | Oct 28, 2008 11:02:54 AM
Consumer is always the last to figure it out. It can't go much lower, lol.
Still buying here with cash. My guess is market lows break but not many rush to sell at this point.
Or, we are going to get a short squeeze soon.
Posted by: John Borchers | Oct 28, 2008 11:07:56 AM
Some idiot on Bloomberg is talking about how irrational consumers had been and how they are now getting rational. Judging someone's rationality depends on what they knew at the time. And, Joe the Plumber was bombarded for years with propaganda about how your house was your best investment, stocks always go up, we are the kings of the world, etc. They did what you would expect.
Now, if those of us who look behind the curtain had bought into the hype, that would be irrational.
Posted by: Mike in NOLa | Oct 28, 2008 11:12:29 AM
This is a tangent, but not really... just something to think about:
During the boom, when Luskin, et al, were saying Bush Tax Cuts = Higher Tax Receipts, and when corporate profits were the highest ever, and so forth, and so on... I asked a question over and over again to nobody in particular:
"Why can't we balance the budget?"
If we couldn't find the will to balance the budget during record treasury receipts, HIGH consumer confidence, Republican control of both ends of Pennsylvania Avenue...
... then when will we ever?
Posted by: jw | Oct 28, 2008 11:18:49 AM
The news about investment bank bonuses is the absolute worst yet. I literally feel nauseous. How can these sub-humans get away with taking taxpayers' money and distributing it to themselves?
Shouldn't bonuses depend largely on the profitability of the firm? These executives should be given this option: either accept your gratious taxpayer funded bonus of $10,000 and keep working OR go to f-ing jail.
Posted by: Adam | Oct 28, 2008 11:22:30 AM
Prosperity is right around the corner.
Problem is, the economy's a fractal polygon...
Posted by: Dr. Kenneth Noisewater | Oct 28, 2008 11:25:12 AM
It's like consumers were in a car that drove off a cliff, and they didn't see the cliff as it was approaching. They didn't even see it as they drove off the edge or descended. Now that they crashed at the bottom, they are looking up going "Hey, there was a cliff back there."
I just wish I wasn't in the same car.
Posted by: Renting in Mass | Oct 28, 2008 11:25:15 AM
@jw: When was the last time a Republican administration has balanced the budget? I believe it was Ike, no? And what were the marginal tax rates on top earners back then? I wasn't alive, but I believe they were something like 90%, no? Since then, their whole "supply side" strategy has been predicated on deficit spending and tax cuts for the wealthy. Cheney even said "Reagan proved deficits don't matter". Perhaps they don't matter in THEIR term as president, but they DO matter a lot to the next administration and country. These people were/are frauds. Government and the treasury to them are merely tools to enrich their corporate friends and eventually themselves.
The delicious irony in all of this is that the Bush administration was hoping to kick the can far enough down the road so they wouldn't be blamed for the coming market/economic crisis, but it happened sooner than they thought it would and right before they were about to move on. That, to me, is hilarious.
Posted by: Jeff M. | Oct 28, 2008 11:26:16 AM
Well, for the disenchanted masses there is this solution:
http://www.youtube.com/watch?v=dib2-HBsF08&feature=related
Posted by: Winston Munn | Oct 28, 2008 11:27:06 AM
I dunno. Selloff will probably slow down short-term but can't help think it will pick up again as a huge amount of Boomers are forced into retirement in the next few quarters and start selling their investments to live.
Posted by: DANM | Oct 28, 2008 11:28:37 AM
Reaffirms my confidence that only those of us who remembered at least the 70s and grew up with depression-era parents who encouraged our frugality were not condemned to repeat those kind of hard times again.
Some of us still have cash on hand and home equity, strangely enough.
Posted by: donna | Oct 28, 2008 11:30:09 AM
Regarding "This sort of sentiment always favors the challenger, not the incumbent party, in the White House race."
While that may be true, and I tend to agree on logic/theory grounds, I think BR should be more cautious. In light of the trashing of the "Which party delivers better stock returns" arguments (Dem Prez w/ Repub. Congress), the more correct response is to say that there's not enough statistical data on Consumer Confidence during Presidential Elections for a valid inference. Certainly not by generalizing from just the 2 cases shown (1980, 1992) where consumer confidence was low at the time of a Presidential election.
Posted by: Wisdom Seeker | Oct 28, 2008 11:32:01 AM
"Reaffirms my confidence that only those of us who remembered at least the 70s and grew up with depression-era parents who encouraged our frugality were not condemned to repeat those kind of hard times again."
I grew up a bit earlier -- the 60s -- and I remember my parents repeating a million times to me: NEVER take a second mortgage out on your home. And they were real estate brokers.
Posted by: Dan | Oct 28, 2008 11:33:15 AM
Consumer confidence is the most useless "economic" statistic that exists. It is based on gasoline prices and perceptions of job security, and in this case has been beaten down by all the fear-mongering in the media.
Adam said: "The news about investment bank bonuses is the absolute worst yet. I literally feel nauseous. How can these sub-humans get away with taking taxpayers' money and distributing it to themselves?"
I agree. But you must know that I-Bankers really think they are the über race. They have behaved with all the charm of a Nazi army of occupation in New York for the last ten years or so. The NYC media has been in fear of upsetting the SS for years but now that they are all holed up in the Reichstag waiting for the end, the press is having a field day.
I think it is very likely that this year's banker bonus plans will be revised downwards by the banks' newest shareholder... vive la résistance !!
Posted by: leftback | Oct 28, 2008 11:33:33 AM
Consumers are 70% of GDP and the confidence number doesn't bode well for the economy going forward. Might be some great bargains this Christmas.
Posted by: Pat G. | Oct 28, 2008 11:34:52 AM
I will save the tiresome "registered Republican" crap on this one. (Applause, wild applause)
Last night, I caught a whiff of Lawrence Kudlow (I am going to start calling him that in deference to Pat Buchanan, whom I can't stand to watch now but idolized back in the 80s) and Dennis Kneale. Kudlow was talking about the huge drop in oil prices being a "$200 billion tax break" for American consumers, and was looking askance at Kneale as to why American consumers have not taken that windfall and started spending already on consumer cyclicals. The impatient attitude reminded me of the daily blather you can hear constantly on CNBC complaining about the fear among many investors to buy equities.
Do Kudlow and Kneale think that the middle class and poor of this country exist to serve as human fodder for debt, consumption, and cogs in the machine of stock market reflation? They seem to think of the American people as automatons or indentured consumers for Kudlow's "investor class".
Posted by: CNBC Sucks | Oct 28, 2008 11:36:17 AM
@CNBC Sucks: Bingo. THEY are the real "elitists" and have no clue about middle class America because they're never around anyone but people of their own ilk. We're just here as the "help" to serve them. They, like most of the media, who condescendingly tries to give us the pulse on average "Joe the Plumber" blah, blah, blah, don't have a clue about this part of the country, which increasingly makes them irrelevant (and why I come to blogs like TBP for the facts).
Posted by: Jeff M. | Oct 28, 2008 11:44:15 AM
« Everything is for the best in the best of the possible world »
What is this rant about?
Our societies are getting more and more perceptive as of today confidence monitors be it American, French, German, have shown that they have No confidence (next question will be on what subject?)
Posted by: Pangloss | Oct 28, 2008 11:49:46 AM
"Do Kudlow and Kneale think that the middle class and poor of this country exist to serve as human fodder for debt, consumption, and cogs in the machine of stock market reflation? They seem to think of the American people as automatons or indentured consumers for Kudlow's "investor class"."
Absolutely and so does our Fascist government. I believe the middle class is just starting to understand that through all the chicanery. Gas here just went below $3 a gallon and propane prices have dropped a "big" twenty cents since March. Oil's down how much?
Posted by: Pat G. | Oct 28, 2008 11:52:07 AM
I'm listening to a Bloomberg podcast from 10/22, and Wilbur Ross nails the problem with our economy right on the head:
"I don't think you can have much of an economy if all that our products are are flipping hamburgers, trading stocks and suing each other."
I completely agree: If all of the growth is in those sectors, then this is the situation we end up getting!
HCF
Posted by: HCF | Oct 28, 2008 11:52:11 AM
