U.S. consumer confidence declined to 57.2 in May 2008 -- its lowest level in 15 years -- as consumers continued to express concern over record gasoline prices and virtually non-existent job growth, the Conference Board announced Tuesday.

Economists surveyed by Bloomberg News had expected the index to drop to 60.0 in May 2008. Consumer confidence totaled 62.8 in April 2008 and 65.9 in March 2008. In February 2008, the index stood at 76.4.

Also, the board said consumers' evaluation of present-day conditions weakened further in May 2008. Those claiming business conditions are "bad" increased to 30.6% from 26.5%, while those claiming business conditions are "good" declined substantially, to 13.1% from 15.4%.

Meanwhile, consumers' assessment of the job market was considerably more pessimistic than last month. Those saying jobs are "hard to get" rose to 28.0% from 27.9, while those claiming jobs are "plentiful" decreased to 16.3% from 17.1%.

Further, the board said consumers' short-term expectations continued to deteriorate in May 2008. Consumers expecting business conditions to worsen over the next six months increased sharply to 33.6% from 27.4%, while those anticipating business conditions to improve increased slightly, to 10.4% from 10.1%.

Economic Analysis: The May 2008 consumer confidence headline says it all: U.S. consumer confidence is at a 16-year low. The slow growth / no growth U.S. economy understandably is weighing on the typical person's outlook. Stagnant wages for many, record-high energy prices, increasing food prices, uncertain corporate prospects and the worst housing market in a generation, suggest difficult economic circumstances for many Americans, and one would expect concern about the above to show up in polls / consumer surveys. The public (correctly) senses that economic conditions are not good for most individuals and businesses; it will take several months of positive economic data points to reverse this outlook.

U.S. Treasury Secretary Henry Paulson's prediction that the 2008 tax rebate will create 500,000 jobs may come up a tad short, if a Bloomberg News survey is telling.

The median estimate of economists surveyed by Bloomberg News forecasts a stimulus package-induced job increase on 158,500 -- far short of Paulson's forecast, Bloomberg News reported Friday.

Paulson and other Bush Administration officials are hopeful the stimulus package will create jobs both directly and via spin-off effect -- for example, jobs created in manufacturing when goods are purchased; and jobs created in feeder industries to the manufacturing sector, etc.

The administration views the tax cut as intrinsic to jump-starting a U.S. economy slowed to a crawl (or perhaps already in negative growth) by its worst housing recession in more than 15 years, and by record-high oil and gasoline prices. (Oil traded Friday up $2.21 to $133.02 per barrel. Oil is up about 100% in 12 months.)

Economic Analysis: Analysts and economists vary regarding the tax rebate's job creation potential, and the 158.5K Bloomberg survey estimate is most likely on the mark. It's possible the tax rebate could create 500,000 new jobs, but the U.S. economy would have to experience an extraordinary boost in GDP growth in 2H 2008. The more likely scenario: only modest GDP growth in 2H 2008, which will make the Bush Administration the first administration to preside over a net drop in payrolls since the Eisenhower Administration in 1960, according to the Economic Policy Institute.

U.S. consumer confidence is at its lowest level since the Nixon Administration of the 1970s, according to one measure. U.S. consumer confidence fell in March 2008 to 64.5 -- a 35-year low -- the Conference Board announced Tuesday.

Economists surveyed by Bloomberg News had expected the index to drop to 73.0 in March 2008. The February 2008 index was revised to 76.4.

The board said that consumers' evaluation of present-day conditions weakened significantly. Those claiming business conditions are "bad" increased to 25.4% from 21.3%, while those claiming business conditions are "good" declined to 15.4% from 19.1%. Consumers' assessment of the job market was considerably more pessimistic than last month. Those saying jobs are "hard to get" rose to 25.1% from 23.4%, while those claiming jobs are "plentiful" decreased to 18.8% from 21.5%.

The dollar plunged to a new record-low of $1.5463 versus the euro Friday, in a global-wide greenback sell-off, before recovering at mid-day after the U.S. Federal Reserve took two actions to pump more money into the beleaguered U.S. banking system.

After the Fed's announcement, the dollar recovered slightly against the euro to $1.5343, but remained down about one-half cent against the British pound at $2.0144 and down about one-tenth yen to 102.60 yen against the Japanese yen.

U.S. jobs data sparks selling

Prior to the Fed's liquidity-enhancing actions, the currency markets drove the dollar down on speculation that the Fed would again lower benchmark, short-term interest rates by 75 basis points at its policy meeting on March 18 in an attempt to stimulate a U.S. economy that shows increasing signs of contraction. Those recession fears grew in the currency market and in the stock market after the U.S. Labor Department announced Friday that the U.S. economy lost 63,000 jobs in February 2008 -- the nation's largest drop in payrolls since March 2003.

However, the dollar recovered somewhat after the Fed, in a surprise move, took two actions to boost banking system liquidity. The Fed increased by $20 billion total the size of its next two Term Auction Facility auctions, known as TAF, to $100 billion, or $50 billion for each auction, to be held on March 10 and March 24.

Second, in an even-more surprising move, the Fed announced the start of new "28-day repurchase transactions" totaling another $100 billion. Further, the Fed said for the new 28-day loans, banks will be able to post as collateral U.S. Treasuries, agency debt, or agency mortgage-backed securities -- which are eligible as collateral in conventional open market operations.

Initial jobless claims fell to 351,000 to for the week ended March 1 -- below the consensus estimate, the U.S. Labor Department announced Thursday. Claims for the previous week were revised up 21,000 to 375,000.

Analysts surveyed by Bloomberg News had expected this week's initial jobless claims to total 360,000.

Also, the four-week moving average decreased 1,500 to 359,500. Economists view the four-week average as a better indicator of unemployment conditions, as it smooths-out anomalies for strikes, holidays, or other idiosyncratic events.

The largest increases in initial claims for the week ending February 23 were in Massachusetts, +3908, California, +3,022, Connecticut, +1,993, Louisiana, +1,851 and New Jersey, +1.494. The largest decreases were in North Carolina, -1,829, Indiana, -1,296, Pennsylvania, -1,118, Tennessee, -1,090, and Washington state, -981.

Consumer confidence in the economy dropped even lower in February 2008, on concerns that job growth will slow and that the U.S. economy may fall into a recession, RBC Bank announced Friday, in its monthly survey.

The RBC Cash Index dropped to 48.5 in February 2008 from 56.3 in January 2008. The February 2008 stat was the index's lowest reading since the bank started the index in 2002, the bank said.

RBC (NYSE: RY) said the February 2008 reading continues a downward trend that has persisted through the last year, with consumer sentiment fell across the board - - with concerns about the U.S. economies health and worries about job security and investing weighing on Americans.

Economist Glen Langan told BloggingStocks Friday this month's RBC survey is consistent with other polled data on the current economic mood of Americans.

With Wall Street still digesting the latest round of sub-par economic data even as it braces for potentially more, economists and analysts said investors can look forward to one 'certainty' in the weeks ahead -- market volatility, as the financial community gauges the U.S economy's probable economic path for 2008.

Market bears will cite the housing sector's recession, related mortgage and asset-backed defaults, slumping corporate earnings and consumer spending, high energy prices, and uncertain job growth as reasons the Dow and the broader markets are likely to continue to fall in the weeks ahead.

Market bulls will cite solid corporate earnings from companies in international markets, relatively low inflation, a declining trade deficit, the fair or undervalued price of some U.S. equities, and the U.S economy's ability to adapt as reasons the markets may reverse their slide in early 2008 and head higher.

Now that's not the way to close out the first week of the new year: for the week the Dow fell 4.3%, the Nasdaq declined 6.3% and the S&P fell 4.5.%.

Further, there are various ways to interpret the Dow's 256-point drop to 12,800.18 Friday.

[The Nasdaq closed down 98.03 points to 2,504.65, the S&P 500 closed down 35.53 points to 1,411.63. Oil fell $1.27 to $97.21, gold declined $3.40 to $865.70, and the 10-year U.S. Treasury closed at 3.85%.]

Obviously, Wall Street's current consensus - - its chief culprit - - is the December 2007 job report, announced by the U.S. Labor Department, which indicated that the U.S. economy created just 18,000 new jobs - - a whopping 52,000 shy of the 70,000-job estimate.

A housing sector that remains in correction mode, to put it diplomatically; a contracting manufacturing sector; declining auto sales; a pull-back in consumer spending; anemic job growth -- historically, these would signal a no-doubt-about-it easing monetary policy by the U.S. Federal Reserve to stimulate the economy.

But hold on, the nation's economic landscape is not that simple, as Fed Chairman Ben Bernanke would no doubt tell you.

Inflation, at both the consumer and producer levels, is rearing its ugly head. Fanned higher by the near-record price of crude oil, inflation is already above the Federal Reserve's target zone (also called the Fed's "comfort zone"), and is likely to move higher later this year if +$80 per barrel oil persists. (Oil fell $1.90 to $97.28 Friday afternoon on fears of a U.S. recession.)

Initial jobless claims fell by 21,000 to 336,000 for the week ended Dec. 29, below the 349,000 consensus estimate, the U.S. Labor Department announced Thursday. Initial claims totaled 326,000 for the same period a year ago.

Meanwhile, the previous week's jobless claims were revised upward to 357,000, the highest weekly level since October 2005, from the 349,000 statistic announced last week.

Also, the four-week moving average dropped to 343,750 from 344,500. Economists view the four-week average as a better indicator of unemployment conditions, as it smooths-out anomalies for strikes, holidays, or other idiosyncratic events.

The number of continuing claims increased by 46,000 to 2.76 million for the week ended Dec. 22, the latest period for which figures were available.

Economic Analysis: This is a mixed bag of news; the current weekly jobless statistic dropped, but last week's statistic was revised higher. Meanwhile, the four-week moving average -- the average economists and analysts concentrate on -- remains at elevated levels and is a 'data point of concern' for the U.S. economy. The U.S. Federal Reserve will keep an eye on that four-week average: if it drifts above 350,000 and remains there, that would suggest a substantial softening of labor market conditions, and most likely, a slowing U.S. economy.

November's 94,000 added jobs statistic is likely to tip the scales in favor of a quarter-point cut in short-term interest rates instead of a half-point cut, economists and analysts say.

"The November job creation number, while not outstanding, is more than enough to quell the half-point hawks," economist Steve Affinito told BloggingStocks Friday. "The Fed will cut interest rates by one-quarter point next week."

Affinito said the November 2007 jobs report was "the sole bright spot" after a string of negative economic data recently reported for the U.S. economy. That data points to a slow-growing U.S. economy (or possibly worse) through Q1 2008, many economists agree.

"If we can register 2% GDP growth in the first quarter of next year, that would be acceptable at this point, and I would take it," Affinito said, adding that Q1 could conceivably show a contraction. For Q4 2007 Affinito estimates that the economy will have slowed to 2.3-2.6% growth.

Initial jobless claims fell by 15,000 to 338,000 for the week ended Dec. 1, but the more-telling four-week moving average reached its highest level -- up 4,750 to 340,000 -- since October 2005, the U.S. Labor Department announced Thursday.

The 338,000 weekly statistic was slightly higher than the 335,000 consensus estimate.

Economists view the four-week average as a better indicator of unemployment conditions, as it smooths-out anomalies for strikes, holidays, or other idiosyncratic events.

The number of continuing claims decreased by 59,000 to 2.6 million for the week ended Nov. 24, the latest period for which figures were available.

Economic Analysis: The four-week moving average -- the average economists and analysts concentrate on -- continues to move higher and remains a 'data point of concern' for the U.S. economy. Joblessness is not high, but job growth is not high either. Further, although not above the more-problematic 350,000-level, the rising four-week moving average suggests that the job market continues to soften, something the U.S. Federal Reserve will keep an eye on, given the historically strong correlation between employment growth and sustainable economic growth.

First-time claims for unemployment benefits fell 11,000 last week to 330,000 -- in line with the consensus estimate, the U.S. Labor Department announced Wednesday.

Meanwhile, the more-telling four-week moving average fell 750 to 329,750, the Labor Department reported. One year ago, new claims for unemployment insurance totaled 322,000.

An average of 2.57 million Americans are receiving state jobless benefits, also called continuing claims; a year ago about 2.43 million Americans were receiving benefits.

The U.S. jobless rate is at 4.7%, and many economists expect it to climb slightly on soft Q4 GDP growth. The U.S. economy recorded Q3 GDP growth of 3.9%, with many economists projecting a Q4 GDP growth rate in the 1.5-2.2% range.