U.S. consumer confidence dropped in November for the fifth straight month to its lowest level in more than seven years. The latest survey, a key indicator for the U.S. economy, was released by the Conference Board, a private business research group. The latest numbers show Americans are increasingly worried about jobs, as the number of unemployed keeps rising this year. Consumer confidence slipped another few points this month, to 82.2, more than experts were predicting.
The figures show consumers are more concerned about the present economic situation than they have been in recent years. Also, persistent fears over terrorism apparently are adding to people's worries.
Conference Board economist Delos Smith says this is not surprising. "You now have a special problem," he said. "We have a fragile people. And any kind of incident, even an accident like the American Airlines [crash in New York] a couple of weeks ago, really hurts. So we have to get away from anthrax, smallpox or any more terrorist attack. There is a healing needed, which is unusual. We usually do not have to worry about the general mental health of a society. But in this case we do. And it really changes everything."
Economists say signs of falling confidence in the U.S. economy could not have come at a worse time. It suggests less robust shopping during the end of the year holiday season.
U.S. retailers are already gloomy, as customers worried about their current financial situation seem to be shopping more cautiously. Consumer spending accounts for about two-thirds of U.S. economic activity.
The consumer confidence numbers had an immediate impact on Wall Street. Stocks dipped with the news. But analysts say investors were probably looking for any excuse to sell, considering the market's climb in recent weeks. Many feel the market has moved unrealistically higher, outpacing expectations for an economic recovery.
Many experts believe the U.S. economy will not start rebounding until the second half of next year.