Friday, April 25, 2008

Consumer Sentiment Falls to 26 Year Low

by Calculated Risk on 4/25/2008 10:19:00 AM

From Bloomberg: U.S. Consumer Sentiment Index Fell More Than Forecast

U.S. consumer confidence fell ... to its lowest level in 26 years, a sign record gasoline prices and rising unemployment will prompt Americans to curb spending.

The Reuters/University of Michigan index of consumer sentiment decreased to 62.6, the weakest since 1982, from 69.5 the prior month.
Recent research suggests that consumer sentiment is a coincident indicator, and this low reading suggests that the economy is in recession, or possibly that gas prices are high, or both. In other words, it tells us what we already know.
"... consumer confidence just reflects the past. You lose your job, your confidence falls. There's not really anything new there."
Dr. Dean Croushore, Feb, 2005
Still this is the lowest reading since the severe recession of the early '80s - and this probably means consumer spending in April will be especially weak.