US consumer confidence sees rebound from record low

Channel News Asia
US consumer confidence sees rebound from record low
Posted: 26 November 2008 0010 hrs

WASHINGTON: US consumer confidence bounced back in November from an all-time low a month earlier, but still reflects weak economic conditions, the Conference Board said on Tuesday.

The business research group said its index of consumer confidence rose in November to 44.9, up from 38.8 in October, which was the lowest on record.

But the survey which measures confidence as a potential indicator of consumer spending, the main driver of economic activity, offered little hope of a quick recovery.

The survey's present situation index fell to 42.2 from 43.5 last month while the expectations index of future activity increased to 46.7 from 35.7 in October.

"The persistent declines in the present situation index suggest that the economy has weakened further in the final months of this year," said Lynn Franco, director of the Conference Board's Consumer Research Centre.

"Inflation expectations, which have been at historically high levels in recent months, subsided considerably as a result of falling gas prices. But, despite the improvement in the expectations index this month, consumers remain extremely pessimistic and the possibility that economic growth will improve in the first half of 2009 remains highly unlikely."

The report is based on a survey of 5,000 US households through November 18.

Those claiming business conditions are "bad" increased to 40.3 percent from 37.1 percent, while those claiming business conditions are "good" edged up to 9.9 percent from 9.4 percent.

The assessment of the labour market was more negative than a month ago. Those saying jobs are "hard to get" rose to 37.2 percent from 36.6 percent in October, while those claiming jobs are "plentiful" decreased to 8.8 percent from 9.0 percent.

Consumers' short-term outlook was less pessimistic. Those anticipating business conditions to worsen over the next six months declined to 28.1 percent from 36.5 percent, while those expecting conditions to improve rose to 11.4 percent from 9.6 percent. - AFP/de