Consumer Confidence Drops to All-Time Low

By Ellen Simon

NEW YORK -- Consumer confidence hit an all-time low in December, dropping unexpectedly in the face of layoffs and deteriorating markets for housing, stocks and other investments.

The Conference Board's Consumer Confidence Index fell to 38 in December from a revised 44.7 in November. Economists surveyed by Thomson Reuters had expected the index to rise incrementally to 45.

The separate Present Situation index, which measures how respondents feel about 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 to 1991 recession.

The dismal job market appears to have outweighed declining gas prices in consumers' minds. Those saying jobs are "hard to get" rose to 42% in December from 37.1% in November, while those claiming jobs are "plentiful" decreased to 6.2% from 8.7%.

The proportion of consumers anticipating an increase in their incomes decreased to 12.7% in December from 13.1% in November.

Those claiming business conditions are "bad" increased to 46.0% in December from 40.6% in November, while those saying business conditions are "good" declined to 7.7% from 10.1%.

The survey is based on a representative sample of 5,000 U.S. households. The cutoff date for December's preliminary results was Dec. 22.