Consumer Confidence in U.S. Plunges as Job Losses Mount, Home Values Fall

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U.S. Economy: Consumer Sentiment Approaches Lowest Since 1980
By Courtney Schlisserman


Feb. 13 (Bloomberg) -- Confidence among U.S. consumers approached its lowest level since 1980 this month after job losses mounted and the slide in home values deepened.

The Reuters/University of Michigan preliminary index of consumer sentiment fell for the first time in three months, to 56.2. The gauge reached a low of 55.3 in November.

The deterioration in confidence underscores the challenge President Barack Obama faces in turning around an economy that analysts see heading toward its worst year since 1946. Today’s report also indicates households will keep boosting savings as a cushion against unemployment or pay cuts.

“There is no imminent upturn in consumer spending on the horizon,” Michael Darda, chief economist at MKM Partners LP in Greenwich, Connecticut, said today in a Bloomberg Television interview. “It’s going to be rough sledding for at least the next two quarters.”

Stocks were little changed, while Treasuries slipped today. The Standard & Poor’s 500 Stock Index was fell 0.3 percent at 832.81 as of 11:39 a.m. in New York. Benchmark 10-year note yields rose to 2.85 percent, from 2.78 percent.

Economists forecast the sentiment gauge would drop to 60.2, according to the median of 58 economists in a Bloomberg News survey. Projections ranged from 56.5 to 64. ........(more)

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