Consumer confidence sinks to 15-year low
Bloomberg reports that consumer confidence is sinking with home values, reaching lows not seen since 1992. From the article on the lack of consumer confidence:
Confidence among American consumers fell in May to the lowest level since 1992 as the two-year housing slump showed no sign of bottoming.
The Conference Board’s confidence index declined more than forecast to 57.2, the New York-based research group said today. The S&P/Case-Shiller home-price index dropped 14.4 percent in March from a year earlier, the most since the figures were first published in 2001. Separate figures from the Commerce Department showed sales of new homes were the second-lowest since 1991 in April.
The slide in home values, along with gasoline near $4 a gallon and rising unemployment, threatens to hobble the consumer spending that accounts for more than two-thirds of the economy.
“When confidence is as bad as it is on the consumer side, it’s hard to believe we’re going to be buying a lot of homes in the near term,” said Scott Anderson, a senior economist at Wells Fargo & Co. in Minneapolis, Minnesota. “The drag from home-price declines, the credit crunch and oil prices will probably be more severe than some had forecast earlier in the year.”