Friday, April 11, 2008

Consumer confidence continues to slide -- hits 26-year low

Worries about inflation and jobs continue to drive down U.S. consumer confidence.

The Reuters/University of Michigan preliminary consumer sentiment index for April fell to 63.2, lower than economists had expected. The index hasn't been this low since March of 1982 during a previous period of profound economic slowdown.

Consumer expectations for near-term inflation rose to the highest level since late 1990, when Iraq invaded Kuwait.

During that same crisis, the University of Michigan Survey of Consumer Sentiment actually created the preliminary mid-month number. In a recent interview, director of the survey, Richard Curtin said as soon as Iraq invaded Kuwait, "our number dropped steeply. I was faced with waiting until the end of the month and saying 'surprise' or giving people a heads up in mid month where our number is heading."

Being a leading economic indicator, the index anticipates economic trends. Based on this and other indicators, experts foresee a protracted, consumer-led recession.