U.S. consumer confidence is at a 10-year low, according to a survey released Tuesday by the Conference Board, a business research group.
The Consumer Confidence Index, which measures economic expectations, now stands at 64 - down almost 15 points from January. It has not been this low since October of 1993. The stock market reacted dramatically to the report. When the news first broke, the Dow Jones Industrial Average initially dropped more than 100 points.
Lynn Franco is the Director of the Consumer Research Center at the Conference Board, a private business analysis group. She said a number of factors are dragging consumer confidence down.
"We've got lackluster job and financial markets, and rising fuel costs really affecting consumers' assessment of the present situation. And then you've got the increasing threat of war and terrorism, which seems to be weighing on their expectations," Ms. Franco said.
Ms. Franco said that consumer confidence is a key indicator of the nation's overall economic health, and that this combination of factors indicates a recovery in the near future is unlikely. Even a quick resolution to the situation in Iraq, she says, will not be enough.
"The key is going to be, and has been for quite some time, the labor market. Until consumers begin to see a turnaround in that, it's not going to boost their confidence levels," Ms. Franco said.
Ms. Franco saidonly an increase in hiring, which could theoretically take place in the latter half of this year, can spur a rebound.