US consumer confidence plunged to a historic low in December amid the rapidly deepening recession and the outlook for the next six months is 'quite dismal', the Conference Board said today.
The private research firm, which has been measuring consumer confidence since 1967, said the index tumbled to 38 in December from 44.7 in November due to the deteriorating economic conditions in the fourth quarter.
Consumers' outlook for the first half of 2009 remains 'quite dismal,' and they see 'only a modest recovery' in the second half of the year, said Lynn Franco, research director at the Conference Board.
'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,' she said.
The record 38 December reading was much lower than the prior low record of 38.8 set in October, and was weaker than the 45.5 reading which had been forecast by analysts.
The month was marked by an escalating global financial crisis and massive government efforts to bail out banks and unblock frozen credit.
On December 1, the world's biggest economy officially was declared to have been in recession since December 2007. Most of the plunge in the December consumer confidence index was due to the present situation index, a component of the headline index, which plummeted to 29.4, from 42.3 in November and 43.5 in October.
The present situation index is now close to levels last seen in the months following the 1990-91 recession, but is not as low as levels reached during the 1981-82 recession when unemployment was high, Franco said.
The expectations index, the other sub-index, slid to 43.8 from 46.2 in November, but was sharply higher than the 35.7 October reading.
Meanwhile, home prices in the top 20 cities in the US slumped to March 2004 levels after more record declines during October, according to a Standard & Poor's/Case-Shiller survey released today.
The survey showed a record year-over-year decline of 18% in the 20 largest US metropolitan areas. In the 10 largest, the decline was 19.1%.
Three of the cities have given back, on average, more than 30% of the value of homes since October of last year. Phoenix was the weakest market, reporting an annual decline of 32.7%, followed by Las Vegas (31.7%) and San Francisco (31%).
