In a further sign that the economic slump is deepening, the Conference Board reported Tuesday that US consumer confidence dropped almost 15 points this month to its lowest level since April 2009. It was the biggest point drop since October 2008, at the height of the financial crisis.
The private research group said its Consumer Confidence Index fell to 44.5 from a revised 59.2 in July, far lower than the 53.3 level forecast by economists.
The depths of consumer pessimism and economic weakness can be gauged from the fact that it takes a reading above 90 to indicate that the economy is on solid footing. “Consumer confidence deteriorated sharply in August, as consumers grew considerably more pessimistic about the short-term outlook,” said Lynn Franco, director of consumer research for the Conference Board.Yeah, well, when you're lied to repeatedly, spin won't work anymore. Which means if the economy doesn't show real gains in the next months, expect to see a Christmas shopping period that is worse than what it was in 2009. Much worse.
And this time, false hype and promises of a recovery won't be enough. People will need to see tangible results. If shopping doesn't really rally as the year comes to a close, the true hollow nature of the recession will be plainly visible.
This is C.I.'s "Iraq snapshot" for Wednesday: