Consumer confidence hits 28-year low in June, says U. Michigan survey

Posted Jun 13th 2008 11:56AM by Joseph Lazzaro
Filed under: Bad News, Employees, Federal Reserve

U.S. consumer confidence in early June plunged to its lowest level in 28 years, an indication American adults are becoming increasingly concerned about rising energy and food prices, job layoffs, and the prospects for a U.S. economic recovery.

The Reuters/University of Michigan Surveys of Consumers said its reading of confidence fell to 56.7 in June from 59.8 in May.

It was the index's lowest reading since May 1980 -- a period also characterized by high oil/gasoline prices and a sluggish U.S. economy.

Economists surveyed by Bloomberg News had predicted that the May index would fall to 59.8. The index stood at 62.8 in April 2008 and 69.5 in March.

U.S. public: jittery

Economist Peter Dawson told BloggingStocks Friday, June's consumer sentiment reading shows an American public "with a warranted case of the jitters."

"We have a difficult economic landscape, from the standpoint of the typical person or employee. Consumers are seeing gasoline and food prices rise by the week, and they're concerned about job losses," Dawson said. "When you combine job worries with price rises just about everywhere you look, it doesn't breed consumer confidence, so it's not surprising the [University of] Michigan survey reading is at its low point in decades."

Further, Dawson said he doesn't have a magic wand, but if he could change one economic fundamental it would be oil prices.

"A lot of economists would probably cite interest rates, and a rate cut from the Fed, but I'd cite oil prices. Oil prices affect so much economic activity, from household appliances that use plastics, to prescription drugs, to how we travel. It's a major cost driver and if oil prices move lower consumer disposable income would also rise, and so would GDP," Dawson said.

Tags: consumer confidence, food prices, gdp, inthenews, jobs, oil prices, polls, Reuters University of Michigan Surveys of Consumers, surveys, U.S. economy

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Reader Comments (Page 1 of 1)

6-13-2008 @ 12:54PM

Americas Watchdog said...

Today the Stock Market is up over 100 points.

We are Americas Watchdog & we have the National Mortgage Complaint Center. Lets see.........#1 Consumer confidence is at a 29 year low.
* We have hyper inflation----even if the government/Wall Street are pretending it does not exist.

* We are projecting that in a year from now 1 in 4 US homeowners will owe more on their home than its worth.

Wall Steet no longer looks 6-10 months out. They look 10 minutes out. Our advice: If you have money in anything but oil get out of this market & go to cash. Wall Street & the Federal Government can't lie forever.

More good news. With Obama as President taxes will go up. More good news for the US economy? Very, very doubtful

6-13-2008 @ 12:52PM

Ronald Chambers said...

Dawson is right regarding the oil and fuel prices as being the culprit. This particular element causes a domino affect and causes all other essencials to rase accordingly. Getting out from under the oil problem will go a long way in helping us solve the balance of the problems at hand.

6-13-2008 @ 1:42PM

william lindblad said...

I agree. What's more is that we tend to view the world as confined to the U.S. We are not the only one's with economic trouble.

6-13-2008 @ 1:57PM

Warren said...

"Our advice: If you have money in anything but oil get out of this market & go to cash."

If I had a rolled up newspaper, I'd be putting it to good use right about now. Please don't poison peoples futures with idiotic advice like this.

The market is down. BUY! God, why do people rush to sell when the market is low? It's unbelievable. Down markets are when fortunes are made.