Consumer Confidence Takes a Nose Dive
January 16, 2008
Consumer confidence has never been lower, at least not since records have been kept. High energy bills, loss of jobs, and massive home foreclosures have eroded whatever confidence people had in the past and replaced it with concerns on the nation’s economy.
In a recent report, the RBC Cash Index revealed that consumer confidence fell to a mark of 56.3 in January of 2008. This is in comparison to 65.9 in December of 2007.
“People are anxious because everything sounds pretty awful these days,” said Bill Cheney, chief economist at John Hancock Financial Services Group.
Experts blame the fall on such factor such as:
An unemployment rate that is hovering at five percent, a two year high.
The housing market mess which has depressed home values in many areas of the country and reduced home owner’s abilities to get home equity loans.
Tighter credit standards that are affecting many consumers as they try to get new home loans or to refinance old home loans.
Tight credit has made it more difficult for consumers to get loans which in turn causes slower sales in many sectors including auto loans, home improvement construction, and big ticket items.
Last January (2007) consumer confidence stood at much higher level of 95.3 according to the polling firm Ipsos