Spring Break
Nation's economic mood darkens as more jobs vanish
AP
Issue date: 1/29/09 Section: News
This is one recession Americans aren't going to spend their way out of.
The Conference Board said Tuesday its Consumer Confidence Index edged down to 37.7 this month, a record low, from a revised 38.6 in December. It stood at about 87 just a year ago.
Americans are battered by headlines about massive job cuts, including thousands at Home Depot, Corning, General Motors and Caterpillar in just the past two days, and are still watching the values of their homes and retirement funds dwindle.
"Virtually, there is no confidence out there," said Bernard Baumohl, chief global economist at The Economic Outlook Group LLC. "Household anxiety has reached a point that we can count them out to get us out of the recession."
Economists believe Americans will remain in a financial funk until they start seeing fundamental improvements in the economy, including a turnaround in the housing and job markets. And two other reports Tuesday suggested that's unlikely to come soon.
The Labor Department announced that state unemployment rates shot up nationwide in December, with Indiana and South Carolina racking up the largest monthly increases. South Carolina's jobless rate bolted to 9.5 percent, more than 2 percentage points above the national rate.
And the Standard & Poor's/Case-Shiller 20-city housing index dropped by a record 18.2 percent in November from the same month a year earlier - the sharpest annual rate since the index's inception in 2000.
The gloomy news initially sent the Dow Jones industrial average lower, but by mid-afternoon it took heart from some positive earnings reports, finishing up about 58 points at 8,174.
President Barack Obama and Congress are scrambling to enact a $825 billion package of increased federal spending, including money for big public works projects and for states, as well as tax cuts to revive the economy.
That could encourage Americans to spend more, but Baumohl believes the relief would be only temporary unless financial institutions become healthy enough to revive lending. Tighter credit has been a challenge for shoppers and businesses alike.
The Conference Board said Tuesday its Consumer Confidence Index edged down to 37.7 this month, a record low, from a revised 38.6 in December. It stood at about 87 just a year ago.
Americans are battered by headlines about massive job cuts, including thousands at Home Depot, Corning, General Motors and Caterpillar in just the past two days, and are still watching the values of their homes and retirement funds dwindle.
"Virtually, there is no confidence out there," said Bernard Baumohl, chief global economist at The Economic Outlook Group LLC. "Household anxiety has reached a point that we can count them out to get us out of the recession."
Economists believe Americans will remain in a financial funk until they start seeing fundamental improvements in the economy, including a turnaround in the housing and job markets. And two other reports Tuesday suggested that's unlikely to come soon.
The Labor Department announced that state unemployment rates shot up nationwide in December, with Indiana and South Carolina racking up the largest monthly increases. South Carolina's jobless rate bolted to 9.5 percent, more than 2 percentage points above the national rate.
And the Standard & Poor's/Case-Shiller 20-city housing index dropped by a record 18.2 percent in November from the same month a year earlier - the sharpest annual rate since the index's inception in 2000.
The gloomy news initially sent the Dow Jones industrial average lower, but by mid-afternoon it took heart from some positive earnings reports, finishing up about 58 points at 8,174.
President Barack Obama and Congress are scrambling to enact a $825 billion package of increased federal spending, including money for big public works projects and for states, as well as tax cuts to revive the economy.
That could encourage Americans to spend more, but Baumohl believes the relief would be only temporary unless financial institutions become healthy enough to revive lending. Tighter credit has been a challenge for shoppers and businesses alike.
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