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NEW YORK -- The Conference Board's Consumer Confidence Index hit a new record low of 38 in December, due to layoffs and the deteriorating markets for housing, stocks and other investments, the Associated Press reported. The previous record was seen in October, with an index of 38.8.
The index fell unexpectedly from a revised index of 44.7 in November. Economists surveyed by Thomson Reuters expected the index to rise incrementally to 45, according to the AP, while a Bloomberg News report cited analysts’ expectations of an increase to 45.5.
A separate Present Situation index, which measures respondents’ feelings about business conditions and employment prospects, fell to 29.4 in December from 42.3 a month prior, the AP reported. It is now approaching levels last seen after the 1990-1991 recession.
"Deepening job insecurity and falling asset prices are outweighing any optimism consumers may have derived from falling gas prices," Dana Saporta, U.S. economist at investment bank Dresdner Kleinwort, told the AP.
The unemployment rate hit a 15-year high of 6.7 percent in November, with year-to-date job losses totaling 1.9 million, according to Bloomberg News.
The average price for a gallon of regular gas fell to $1.62 on Dec. 28, a 61-percent decrease from July’s record, the report stated.
Meanwhile, crude oil prices resumed their downward turn yesterday on concerns over the world economy and lower oil demand, after rising towards $40 earlier in the week, a separate AP report stated. Light, sweet crude for February delivery fell 74 cents to $39.28 a barrel in electronic trading on the New York Mercantile Exchange by noon in Europe.
Prices turned upward late last week, rising 14 percent and reaching upwards of $40 per barrel, due to a conflict between Israel and Hamas, which could inflame tensions in the Middle East.
Concerns that a slowing global economy will dampen crude demand helped contain a rally in oil prices, and if the Israel-Gaza conflict doesn't escalate, prices could fall below $30 during the next few months, according to Jonathan Kornafel, Asia director for market maker Hudson Capital Energy in Singapore.
To stem the fall, the Organization of Petroleum Exporting Countries (OPEC) announced production cuts totaling more than 4 million barrels per day during the last few months, the AP reported.