Americans, pinched at the pump and at home, feel increasingly pessimistic about the economy. According to The Conference Board, the Consumer Confidence Index slipped again in May, settling at 57.2. It represents the lowest reading in 16 years for the indicator, which started in 1985.
"Weakening business and job conditions coupled with growing pessimism about the short-term future have further depleted consumers' confidence in the overall state of the economy," explained Lynn Franco, director of The Conference Board Consumer Research Center. "Consumers' inflation expectations, fueled by increasing prices at the pump, are now at an all-time high and are likely to rise further in the months ahead."
There are many reasons for consumers' growing negativity, from sinking home values to spiking fuel prices. The national average price for gas today is $3.937 per gallon, according to the American Automobile Association's Daily Fuel Gauge Report (www.fuelgaugereport.com). Home prices have fallen between 3.1 percent (Office of Federal Housing Enterprise Oversight) and 14.1 percent (S&P/Case-Shiller), depending on the index. Even worse, it hardly matters which figure one uses; both OFHEO and Case-Shiller say the drops are the steepest in the history of their data.
Consumers don't exactly sound hopeful about the workplace, either. One-third (33.6 percent) of respondents told The Conference Board in May that they believe business conditions will get worse during the next six months; 28 percent stated that jobs are "hard to get."
Alison Rice is senior editor, online, for BUILDER magazine.