Consumer confidence hit a more than 40-year low in December in the face of rising layoffs, while home prices in 10 major U.S. cities dropped in October by the sharpest amount in 21 years.
Consumers have been nervous about spending for months -- putting off big-ticket purchases, forgoing new clothes and choosing store brands at the grocery store -- all of which may make this the worst holiday season for retailers in decades.
The Consumer Confidence Index measured by the Conference Board, a private research group, fell to 38 in December from a revised 44.7 in November. That is its lowest point since the group began compiling the index in 1967, and below the previous low of 38.8 in October. Economists surveyed by Thomson Reuters had expected the index to rise incrementally to 45.
The unemployment rate hit a 15-year high in November, and economists expect additional job losses in the first half of 2009. Those saying in the Conference Board survey that jobs are "hard to get" rose to 42 percent in December from 37.1 percent in November, when the unemployment rate stood at 6.7 percent.
Those claiming business conditions are "bad" increased to 46 percent in December from 40.6 percent in November.
The Conference Board's Present Situation index, which measures how respondents feel about current business conditions and employment prospects, fell to 29.4 in December from 42.3 in November. It is now close to levels last seen after the 1990-1991 recession.
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