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Business

US Consumer Confidence Down

Figures for the all-important consumer confidence index came in lower than expected for November. Hopes for a quick recovery have all but vanished.

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Stocks slide on news of bleak figures

Consumer confidence figures for November fell to 82.2 in November following a reading of 85.3 in October. Many economists had expected the confidence index to rise.

However, Tuesday’s figures are the lowest in seven years. The Conference Board, a New York-based private business
research group, puts the blame on rising unemployment and mass lay-offs.

Many analysts see the unemployment rate hitting six percent by early next year. As a result of the slump in consumer confidence, the Conference Board also dampened hopes for a pre-Christmas consumer spending spree.

The blue-chip Dow Jones industrial average fell 119.42 points, or 1.2 percent, while the tech-heavy Nasdaq Composite Index fell 24.49 points, or 1.26 percent.

Economists and policy-makers closely monitor consumer confidence because it can give hints about future consumer spending, which accounts for about two-thirds of U.S. economic activity.

Anticipating better times ahead

An economic rebound is not expected until next year. Markets have also stumbled over figures showing that the United States has been mired in recession for most of 2001.

Following the attacks of September 11, the most important U.S. stock indices had started to move towards breaking through some key psychological barriers again.

But the Dow Jones industrial average is still below the psychologically important level of 10 000. At the same time, the Nasdaq is inching its way back to the 2000 mark.