Consumers are an Unhappy Bunch

Posted by Patrick O'Connor on 6/24/08 1:36 pm

The Consumer Confidence Index sank 7.7 points in June to 50.4, a 16-year low, and well below the 56.0 consensus.  The details were gruesome: current conditions index fell to 64.5 from 74.2 and expectations index dropped to 41.0 from 47.3.  The latter is the lowest reading since the survey began in 1967, and is “consistent with consumption falling at a 3% y/y rate,” said Ian Shepherdson at High Frequency Economics.  The worst quarter ever was -1.5% in Q4 1974.

The bottom line is the tax rebate checks are getting spent, but they’re failing to cheer up consumers as food and gas prices go through the roof, and home prices continue to fall rapidly.  The recent declines in the stock market are not helping either.

The Fed will not raise interest rates anytime soon.

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