NewsMine — economy — united-states — 2002-early-fall — Viewing Item

Confidence pummeled Original Source Link: (May no longer be active)    http://story.news.yahoo.com/news?tmpl=story2&cid=568&ncid=749&e=1&u=/nm/20021029/bs_nm/economy_consumers_dc http://story.news.yahoo.com/news?tmpl=story2&cid=568&ncid=749&e=1&u=/nm/20021029/bs_nm/economy_consumers_dc Consumers' Confidence Pummeled in October 31 minutes ago By Ross Finley NEW YORK (Reuters) - Worries about jobs and a possible U.S. attack on Iraq pummeled consumer confidence to its lowest level in nine years in October, a report said on Tuesday, signaling a rough road ahead for economic recovery. The Consumer Confidence Index (news - web sites) fell for a fifth straight month in October to 79.4, its lowest level since November 1993 and far below the trough carved after the Sept. 11 attacks of last year on the U.S., The Conference Board (news - web sites), a private business research group, said in a release. The drop, from a revised 93.7, was well below consensus forecasts of 89.7 and rattled financial markets as it raised the prospects for an interest rate cut from the Federal Reserve (news - web sites) to shore up confidence. "A weak labor market, the threat of military action in Iraq, and a prolonged decline in the financial markets have clearly dampened both consumers' confidence and their expectations for the near future," Lynn Franco, director of the survey, said in a statement. Many economists are worried the odds of a pullback in spending are rising right ahead of the crucial holiday retail season. Most retailers book about a quarter of their sales during the November-December holiday season and some make the bulk of their profits during that period. Already many retailers are feeling the pinch on profit margins from consumers' aggressive hunt for bargains. "The outlook for the holiday retail season is now fairly bleak. Without the likelihood of a pickup in consumer spending, an already weak economic recovery could weaken further," Franco said. U.S. Treasuries rallied after the data were released as market participants piled on bets the Fed will cut interest rates to help the economy. The Dow Jones industrial average tumbled after the data were released. The dollar also fell. "The dominoes are falling one by one and the consumer is just the latest. You should expect the Fed to cut rates on November 6, probably by 50 basis points," said Ram Bhagavatula, chief economist at Royal Bank of Scotland Financial Markets. The Present Situation Index, a measure of consumers' attitudes about the economy and their finances right now, plunged to its lowest level since early 1994, to 77.5 in October from 88.5 in September, and the Expectations Index, a gauge of consumers' six-month outlook, fell to 80.7 from 97.2. Consumers' worries about the job market also increased to their highest level since 1994. The jobs-hard-to-get index rose to 27.3 from 25.4 percent in September. A rise in this index often foreshadows a move up in the jobless rate, which currently stands at 5.6 percent. Consumers' plans to buy a new home or car also fell during the month, raising concerns about two areas of the economy that have been firing on all cylinders.

Confidence pummeled Deflational spiral { July 23 2002 } Dow 4 year low { September 24 2002 } Dow tumbles july 20 Ecnomy weakens { September 17 2002 } Fears on rise { July 17 2002 } Foriegn investors cautious { August 4 2002 } Free fall dollar Greenspan drepressing effects Greenspan resilient More interest cuts { August 7 2002 } Poverty swells { September 24 2002 } Saudis withdraw { August 20 2002 } Seniors debt Third quarter ratecut Trade decefit record { July 19 2002 } Trade deficit low { June 20 2002 } Tumble below 8000 Unemployment { May 3 2002 } Us weak invest { June 27 2002 } Files Listed: 20

Correction/submissions

CIA FOIA Archive

National Security Archives

This site contains copyrighted material the use of which has not always been specifically authorized by the copyright owner. We are making such material available in our efforts to advance understanding of environmental, political, human rights, economic, democracy, scientific, and social justice issues, etc. We believe this constitutes a 'fair use' of any such copyrighted material as provided for in section 107 of the US Copyright Law. In accordance with Title 17 U.S.C. Section 107, the material on this site is distributed without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes. For more information, go to: http://www.law.cornell.edu/uscode/17/107.shtml. If you wish to use copyrighted material from this site for purpose of your own that go beyond 'fair use', you must obtain permission from the copyright owner.