Consumer Confidence Hits New Low

Posted by Patrick O'Connor on 10/28/08 8:05 am

The Conference Board’s Consumer Confidence Index plummeted to 38.0 in October from 61.4 in September.  The reading was the lowest since the data series began in 1967, and it is consistent with consumer spending falling at a 3.5% annualized rate.  However, some economists believe the confidence reading overshot on the downside and that it will rebound somewhat after consumers benefit from the huge drop in gasoline prices.

No matter how you slice it, though, consumer spending will be negative for the foreseeable future.  That will guarantee negative GDP for several months, if not quarters.  The first estimate of GDP for the third quarter gets released on Thursday.  Economists believe it will be down 0.50%, according to Economy.com.

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