Consumer confidence and home prices hit grim records
NEW YORK (Reuters) - The U.S. economy extended its run of record-breaking dismal data on Tuesday, with consumer confidence and home prices registering a pair of grim milestones.
U.S. consumer confidence fell to a record low in December as the worst job market in 16 years hammered sentiment, the Conference Board business research firm said.
The dour sentiment has had a harsh impact on spending. The U.S. holiday shopping season has been the worst since at least 1970 due to the recession, the International Council of Shopping Centers said.
Prices of U.S. single-family homes in October posted a record fall of 18.0 percent from a year earlier, according to the closely watched Standard & Poor's/Case-Shiller Home Price Indices.
Business activity in the U.S. Midwest continued to shrink in December but at a less severe rate than expected, and input prices fell sharply.
The data was the latest reminder that the U.S. economy is in for a tough slog after a year-long recession, which many expect to continue during the first half of 2009.
"Really at this point we are not going to be seeing anything fundamentally positive from the U.S. for the time being," said Michael Woolfolk, senior currency strategist at the Bank of New York Mellon in New York.
On Wall Street, stocks closed higher despite the weak data. U.S. government bonds, which are highly sought after by investors during troubled economic times such as these, also rallied.
The Institute for Supply Management-Chicago business barometer rose to 34.1 for December from 33.8 in November. The reading was better than the 33.0 economists had forecast, but was still well below the 50 level that separates expansion from contraction.
"RAPID AND STEEP DETERIORATION"
The Conference Board said its Consumer Confidence Index fell to 38.0 in December from a slightly downwardly revised 44.7 in November.
The median forecast of economists polled by Reuters was for a reading of 45.0. Their 62 forecasts ranged from 40.0 to 51.1.
"The further erosion of the Consumer Confidence Index reflects the rapid and steep deterioration of economic conditions that occurred in the fourth quarter of 2008," said Lynn Franco, director of the Conference Board's Consumer Research Center.
"The overall economic outlook remains quite dismal for the first half of 2009, and only a modest recovery is expected in the second half."
Chief among consumers' woes has been spiraling job losses in recent months. Continued...
